The Bundesbank said in its monthly report that Germany is expected to face slower growth and a new spike in inflation, as reported by Reuters.

"The future development of the energy market is very uncertain, especially with regard to natural gas deliveries from Russia," the Bundesbank said. "The risks for the price outlook are clearly pointing upwards."

Market reaction

Germany's DAX Index showed no reaction to this report and was last seen posting small daily gains. Meanwhile, EUR/USD continues to trade deep in negative territory near 1.0150.