The French leader sparked optimism when he suggested concessions over the Irish backstop issue, a potential softening of Europe’s stance and a step toward curbing a no-deal Brexit. Mr Johnson was optimistic, saying “[with that] energy and creativity we can find a way forward”. However, Mr Macron later dampened his own sentiment, insisting the Irish backstop is “indispensable” for the preservation of political stability within the European bloc. 

Analysts have also suggested the 30-day timetable mentioned by both Mr Macron and Angela Merkel earlier in the week would prove untenable in practical terms. 

Meanwhile, the Euro fell after this morning’s release of the flash German manufacturing PMI, which remained firmly mired in contraction territory in August. 

Despite a rise from 43.2 to 43.6, Germany’s economy shows no signs of significant recovery amid European political uncertainties and fears for a global recession. 

Phil Smith, a Principal Economist at HSI Markit, was downbeat: “Germany remains a two-speed economy, with ongoing growth of services just about compensating for the sustained weakness in manufacturing.

“Although improving slightly, the survey’s output data haven’t changed enough to dispel the threat of another slight contraction in GDP in the third quarter.”

The Eurozone’s flash PMI composite figure also improved today, rising from 51.5 to 51.8 in August.

In political news, Italy’s centre-left Democratic Party are seeking a coalition with the Five-Star Movement, which could force Deputy Prime Minister Matteo Salvini’s the League to form an opposition party. 

Francesco Papadia, a Senior Fellow at the Bruegel think tank was hopeful: “[The previous coalition] was the worst possible coalition for economic policy, both in terms of fiscal policy, both in terms of structural policies. So, anything that comes in place of that would be better.”



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