What if a sharp unwinding of CAD carry trades drives loonie and rate volatility into a slowing economy?
A sharp unwind of CAD-funded carry and a BoC easing cycle drive currency and rate volatility, complicating the inflation outlook as import costs rise into a slowing economy.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
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 (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 6–18 months 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. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. A sharp unwind of CAD-funded carry and a BoC easing cycle drive currency and rate volatility, complicating the inflation outlook as import costs rise into a slowing economy. The trigger decomposes into signed root‑shocks — FX carry appetite ▼ · Dollar/reserve confidence ▲ · Recession signal ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -2.7% hist -2.77–-0.45% · other way +23.24% (n=12) |
| 2 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -1.5% hist -5.94–+2.67% · other way +9.75% (n=11) |
| 3 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -1.4% hist -1.36–-0.52% · other way -3.1% (n=10) |
| 4 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▼ -1.1% hist -2.31–+0.51% · other way +0.63% (n=12) |
| 5 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -1.0% model prior · unmeasured |
| 6 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -1.0% hist -7.96–+5.16% · other way +2.79% (n=11) |
| 7 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▼ -1.0% hist -1.48–-0.08% · other way +23.11% (n=10) |
| 8 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▲ +0.6% hist +0.17–+0.3% · other way +1.04% (n=12) |
| 9 | Aussie dollar AUD 📈 chart | FX | ▼ -0.5% hist -1.44–+0.32% · other way -1.81% (n=12) |
| 10 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.5% hist -0.87–+0.79% · other way -7.07% (n=12) |
| 11 | Turkish lira TRY 📈 chart | FX | ▼ -0.6% hist -9.73–+2.03% · other way -0.66% (n=12) |
| 12 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.5% hist -0.33–-0.07% · other way +0.63% (n=12) |
| 13 | Financials XLF 📈 chart | Equity | ▼ -0.4% hist -0.35–-0.11% · other way -0.27% (n=12) |
| 14 | EUR/USD EURUSDon Hyperliquid 📈 chart | FX | ▼ -0.5% hist -1.51–+0.43% · other way -1.12% (n=12) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 32 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| TRY TRY | SHORT | -8.2% · 5d -1.2% | 80% | 15 | 0.56 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.6% · 5d -0.3% | 73% | 15 | 0.37 | ✓ matches cascade |
| CNY CNY | SHORT | -0.4% · 5d -0.4% | 73% | 15 | 0.37 | ✓ matches cascade |
| SOL SOL | SHORT | -0.2% · 5d -6.7% | 71% | 7 | 0.35 | ✓ matches cascade |
| AUD AUD | SHORT | -1.1% · 5d -0.7% | 67% | 15 | 0.31 | ✓ matches cascade |
| INR INR | SHORT | -1.1% · 5d -0.2% | 67% | 15 | 0.31 | ✓ matches cascade |
| JPM JPM | SHORT | -2.5% · 5d -1.5% | 67% | 27 | 0.31 | ✓ matches cascade |
| COIN COIN | SHORT | -0.6% · 5d +0.8% ↺ fades | 67% | 6 | 0.27 | ✓ matches cascade |
| US dollar DXY | SHORT | +-0.0% · 5d +0.1% ↺ fades | 61% | 30 | 0.21 | ⚠ differs |
| 30y yield DGS30 | SHORT | -7bp · 5d -3bp | 63% | 28 | 0.21 | ✓ matches cascade |
| 10y yield DGS10 | SHORT | -8bp · 5d -4bp | 62% | 30 | 0.20 | ✓ matches cascade |
| ETH ETH | SHORT | -7.6% · 5d -7.5% | 62% | 8 | 0.17 | ✓ matches cascade |
| EURUSD EURUSD | SHORT | -1.2% · 5d -1.1% | 60% | 15 | 0.17 | ✓ matches cascade |
| GBPUSD GBPUSD | SHORT | -0.4% · 5d -0.5% | 60% | 15 | 0.17 | ✓ matches cascade |