Share markets around the world edged significantly higher on Tuesday, extending yesterday’s gains, ahead of today’s highly anticipated meeting of the finance chiefs of the G-7. This teleconference is likely to be today’s main event as investors desperately wait for a strong and coordinated policy response to the growing impact of coronavirus. There is clear expectation of a new fiscal and monetary policy, but no one knows exactly how big the new set of measures will be. President Trump keeps on pressuring the Federal Reserve to proceed with significant easing and rate cuts while the President of the ECB Christine Lagarde also want a strong reaction from central banks. The current rally on risky assets is very short-term and is likely to be driven by high expectations from investors ahead of this financial meeting.
However, finance chiefs and central banks can still surprise traders by topping estimates in the size of their new set of fiscal and monetary measures, which could lift share markets further around the globe. The best performance is coming from Frankfurt where the DAX-30 Index bounced back above 12,000pts. Prices are challenging their first major resistance below 12,170pts-12,220pts while the 55-day moving average is already registering a trend reversal. Next upward targets are located at 12,500pts, 12,755pts and 12,975pts by extension.
