At a press conference in Washington yesterday, President Trump announced that a blood plasma-based treatment for the disease had shown positive results and that he had gotten the FDA to approve its use in patients as an emergency measure.
Although this treatment had already been considered by scientific researchers and had even been used in various cases around the world, the market's announcement has been positively taken as if it were something new.
The method is complicated since it requires the donation of plasma by those infected by the disease already recovered, and its effectiveness has not been scientifically proven. Therefore, it is just a desperate attempt by Trump to advance positions in the electoral polls that are still negative for him.
The positive reaction of the market is also due to the statements of Chinese and US officials in which they imply that trade negotiations are losing intensity in the open confrontation of recent days and that agreements may be reached to avoid bans on some companies from China with which the American government had previously threatened them.
In short, a continuous tug of war still does not have a clear outcome or solid fundamentals for investors to maintain a positive risk mood permanently.
The general market sentiment has a clear, optimistic bias. This is demonstrated by the fact that any positive news, no matter how little credibility it may have, is taken with some enthusiasm by market participants.
The massive amount of liquidity that governments and central banks have brought into the system is the main reason for this. Unlike other crises, this is not a financial or liquidity crisis, and global fund managers try to find the slightest opportunity to allocate this extra liquidity in the market.
In a tranquil session without any publication of relevant economic figures, most of the stock markets have experienced rises around 1%, highlighting Germany30 that has gained 2% on the day.
But still far from its resistance level in the 13277 area and with hourly RSI at an overbought level.
The US Dollar has weakened with the market's best risk mood at the start of today's session.
EUR/USD has rebounded to an intermediate resistance zone between 1.1830-50 but has failed to break above these levels and therefore remains within the downward correction movement that started early last week.