What if DXY break above cycle highs forces a defensive EM rate-hike wave?
A decisive dollar breakout pressures EM currencies enough that several central banks hike pre-emptively to defend FX, tightening conditions into slowing growth.
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 0–6 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 decisive dollar breakout pressures EM currencies enough that several central banks hike pre-emptively to defend FX, tightening conditions into slowing growth. The trigger decomposes into signed root‑shocks — US dollar (DXY) ▲ · EM currencies ▼ · Credit spreads ▲ · Fed policy path ▲ · 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 | Turkish lira TRY 📈 chart | FX | ▼ -1.2% hist -0.74–-0.11% · other way +0.81% (n=11) |
| 2 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -1.1% hist -3.37–+0.51% · other way +19.6% (n=12) |
| 3 | Indian rupee INR 📈 chart | FX | ▼ -1.0% hist -1.06–-0.12% · other way -0.65% (n=11) |
| 4 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▲ +0.8% hist +0.04–+0.98% · other way +0.48% (n=12) |
| 5 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -0.8% hist -4.98–+4.35% · other way +6.12% (n=9) |
| 6 | EUR/USD EURUSDon Hyperliquid 📈 chart | FX | ▼ -0.7% hist -1.53–+0.24% · other way -0.3% (n=11) |
| 7 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.7% hist -0.86–-0.01% · other way +1.5% (n=12) |
| 8 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.6% hist -5.9–+3.35% · other way +1.4% (n=9) |
| 9 | Chinese yuan CNY 📈 chart | FX | ▼ -0.6% hist -0.9–+0.05% · other way +0.13% (n=11) |
| 10 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.6% model prior · unmeasured |
| 11 | GBP/USD GBPUSDon Hyperliquid 📈 chart | FX | ▼ -0.6% hist -0.75–+-0.0% · other way -0.1% (n=11) |
| 12 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -0.5% hist -1.95–+1.0% · other way +8.3% (n=9) |
| 13 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.5% hist -1.39–+3.72% · other way -4.46% (n=12) |
| 14 | Tech sector XLK 📈 chart | Equity | ▼ -0.5% hist -0.37–-0.09% · other way +2.27% (n=12) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 36 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 |
|---|---|---|---|---|---|---|
| KRW KRW | SHORT | -1.7% · 5d +0.1% ↺ fades | 74% | 27 | 0.45 | ✓ matches cascade |
| COIN COIN | LONG | +5.8% · 5d +6.2% | 75% | 8 | 0.34 | ⚠ differs |
| High-yield credit HYG | SHORT | -0.6% · 5d +0.0% ↺ fades | 68% | 25 | 0.30 | ✓ matches cascade |
| MSTR MSTR | SHORT | -2.5% · 5d -2.5% | 64% | 28 | 0.23 | ✓ matches cascade |
| Bitcoin BTC | SHORT | -5.7% · 5d -4.1% | 64% | 11 | 0.21 | ✓ matches cascade |
| JPM JPM | SHORT | -0.9% · 5d -1.8% | 62% | 34 | 0.21 | ✓ matches cascade |
| GBPUSD GBPUSD | SHORT | -0.4% · 5d -0.0% | 59% | 27 | 0.17 | ✓ matches cascade |
| USDJPY USDJPY | LONG | +0.7% · 5d -0.3% ↺ fades | 57% | 28 | 0.13 | ✓ matches cascade |
| Gold XAU | LONG | +0.0% · 5d -0.2% ↺ fades | 57% | 28 | 0.13 | ⚠ differs |
| EURUSD EURUSD | SHORT | -1.1% · 5d -0.3% | 56% | 27 | 0.11 | ✓ matches cascade |
| AUD AUD | SHORT | -0.6% · 5d +0.1% ↺ fades | 56% | 27 | 0.11 | ✓ matches cascade |
| US dollar DXY | LONG | +0.5% · 5d +0.2% | 56% | 36 | 0.10 | ✓ matches cascade |
| TRY TRY | LONG | +0.3% · 5d +0.7% | 56% | 27 | 0.08 | ⚠ differs |
| ETH ETH | SHORT | -1.6% · 5d -4.0% | 56% | 9 | 0.07 | ✓ matches cascade |