Basic concept of the first rule of thermodynamics
Chemical energy of system has been converted to thermal energy of both  the system and the surrounding water. 

Additionally, water did work on system, as the system shrinked down.

$$\Delta E_\mathrm{system}=-C_\mathrm{water} \cdot \Delta T_\mathrm{water}-p \cdot \Delta V_\mathrm{system}$$

For $H=E + p \cdot V$, 
$\Delta H=\Delta  E + p \cdot \Delta V + V \cdot \Delta p$

As p is constant, 

$\Delta H=\Delta  E + p \cdot \Delta V $

$\Delta H_\mathrm{system}=-C_\mathrm{water} \cdot \Delta T_\mathrm{water}$

where $H$ means enthalpy, energy at the constant pressure.

If we considered other thermodynamic quantities like Gibbs energy or entropy, we would need to examine the underwent reaction and system composition. But if the system energy is considered, its change is related just to exchanged thermal energy and work.

$q$ in the equation $\Delta E = q+w$ means heat transfers to the system, so it is negative. $w$ is work done on system and is positive.  $\Delta E$ is very probably negative, as work value would be much less than transferred heat.