The DAX continues to show surprising resilience despite ongoing hawkish rhetoric from the ECB. With inflation still a sticky point in the Eurozone, the market seems to be pricing in a relatively soft landing, or at least a less aggressive tightening cycle than some policymakers are signaling. Is this a case of the market knowing something we don't, or simply a lag in pricing in future headwinds?
I'm still cautious. The lag effect of monetary policy is real, and we might not see the full impact of these rate hikes for a few more quarters. This resilience could be fleeting.
I'd lean towards the market having priced in the worst already. Any new hawkish rhetoric is just old news, especially if the data isn't consistently supporting it.
I think it's more about a 'less bad' scenario than a truly 'soft landing'. European economies might be more resilient to higher rates than initially feared.
Or maybe investors are just looking for relative value. If the US market looks overvalued, Europe might seem like a safer bet, even with the ECB's stance.
Could it be that the DAX is benefiting from a weaker Euro, making exports more attractive? That might be counteracting some of the ECB's pressure.