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ECB's Hawkish Hints and Euro Equities
Lagarde's recent comments have certainly thrown a cat amongst the pigeons regarding rate hikes. With the ECB sounding more hawkish than anticipated, it's making me reconsider some of my more aggressive long positions in European growth names. The initial bounce in $EURUSD has been modest, but if the market starts to truly price in multiple hikes, the pressure on earnings for heavily indebted companies could be interesting to watch. Keeping a close eye on the DAX for any cracks forming if this narrative solidifies.
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That's a valid concern. I'm looking at how much of this is already priced in; the market tends to overreact to initial hawkish signals but often smooths out once the path is clearer. Are you looking at specific sectors, or just growth names broadly?