DAX Index is trading over 1.7% higher this week to erase losses from the prior month. In the meantime, Germany is calling for the EU to speed up the stimulus package as the number of new infections on the old continent keeps rising.Fundamental analysis: Recovery funds needed quicker
Olaf Scholz, the Finance Minister of Germany said that an increase in new coronavirus cases in Europe is stressing the need to implement the agreed 750 billion euros of EU recovery funds as fast as possible.
In July, European leaders have agreed on a historic deal about a massive debt-financed stimulus package for their coronavirus-hit economies, however, they haven’t discussed details on how quickly to release the funds and how should the bloc repay the debt.
“The new normal in times of the coronavirus pandemic requires that we remain vigilant and adapt our daily routine to the development of the pandemic,” Scholz said before a virtual meeting with his fellow finance ministers from other EU member states.
“The sharp rise in infections also underlines the need to implement Europe’s ambitious recovery programme timely and to set the right course for Europe’s future,” added Scholz, whose country currently leads the 27-member bloc.
He added that the recovery funds should lift Europe from this crisis and make it stronger, more innovative, more climate-friendly, more digital and more cooperative.
“We have made impressive progress on the Recovery and Resilience Facility in a very short time. I am confident that we can take the next important step,” he said.
Scholz said the main objective of the meeting was to agree on the regulation text. Germany wants to make sure the recovery funds are available next year. He said that being able to use the recovery money during the crisis is vital for a proper recovery.
That’s why Europe needs to use the opportunities offered in digital finance but without jeopardizing consumer protection, financial stability and monetary sovereignty, Scholz added.Technical analysis: Index gains
DAX 30 closed at 12906, or 0.61% higher today to build on Monday’s gains. This way, the index erased last month’s losses as the buyers attempt to push the index towards the recent highs.DAX Index daily chart (TradingView)
Still, the index is still trading below the ascending trend line (the blue line). This line marks the resistance at 13150, followed by 13450 which marks the second level of resistance. On the downside, the 200-DMA at 12650 offers support.Summary
Finance minister of Germany Olaf Scholz said the agreed 750 billion of EU recovery capital should be implemented quickly due to rising coronavirus infections. Germany’s DAX 30 gained over 1.7% this week as the buyers attempt to push the index towards recent highs.