What if Germany's AfD enters the federal government?
AfD entering federal government triggers a DAX selloff and an EU cohesion-fund standoff — short DAX and German autos (China/EU-exposed), widen periphery and Bund-swap spreads as cohesion risk rises. Rhymes with the 2018 Italian populist-coalition BTP shock and France's 2024 spread widening. Transmission: Germany funds EU cohesion, so a Berlin-Brussels clash pressures periphery debt and the euro; novel risk is core-country, not periphery, populism.
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The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 1–3 years horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. AfD becomes junior coalition partner after Bundestag election, triggering DAX selloff and EU cohesion-fund standoff. The trigger decomposes into signed root‑shocks — Risk appetite ▼ · Credit spreads ▲ — which propagate through our causal graph to the markets below.