What if ECB-Fed divergence drives the euro toward parity with the dollar?
An ECB cutting faster than a patient Fed widens rate gaps and pushes EUR/USD toward parity, boosting eurozone exporters while importing inflation and complicating the easing path.
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 mixed shock. An ECB cutting faster than a patient Fed widens rate gaps and pushes EUR/USD toward parity, boosting eurozone exporters while importing inflation and complicating the easing path. The trigger decomposes into signed root‑shocks — US dollar (DXY) ▲ · European energy ▲ · 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 | EUR/USD EURUSDon Hyperliquid 📈 chart | FX | ▼ -0.7% hist -1.02–+0.02% · other way +1.0% (n=11) |
| 2 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▲ +0.7% hist -0.01–+1.04% · other way -0.65% (n=12) |
| 3 | GBP/USD GBPUSDon Hyperliquid 📈 chart | FX | ▼ -0.5% hist -0.8–+0.02% · other way -0.47% (n=11) |
| 4 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▼ -0.4% hist -0.49–+0.46% · other way +1.91% (n=11) |
| 5 | USD/JPY USDJPYon Hyperliquid 📈 chart | FX | ▲ +0.4% hist +0.06–+2.39% · other way -0.81% (n=11) |
| 6 | Turkish lira TRY 📈 chart | FX | ▼ -0.5% hist -0.41–+0.35% · other way -8.04% (n=11) |
| 7 | Indian rupee INR 📈 chart | FX | ▼ -0.4% hist -0.28–-0.1% · other way +0.65% (n=11) |
| 8 | Korean won KRWon Hyperliquid 📈 chart | FX | ▼ -0.3% hist -1.16–+0.13% · other way +1.36% (n=11) |
| 9 | Aussie dollar AUD 📈 chart | FX | ▼ -0.3% hist -0.42–+-0.0% · other way +0.61% (n=11) |
| 10 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -0.2% hist -4.39–+8.38% · other way +3.82% (n=11) |
| 11 | Chinese yuan CNY 📈 chart | FX | ▼ -0.2% hist -0.83–+0.03% · other way -0.01% (n=11) |
| 12 | 2y Treasury yield DGS2 | Rate | ▲ +2bp model prior · unmeasured |
| 13 | 30y Treasury yield DGS30 📈 chart | Rate | ▲ +2bp hist -1.55–+25.11% · other way +1.9% (n=12) |
| 14 | 10y Treasury yield DGS10 📈 chart | Rate | ▲ +2bp hist -1.05–+29.86% · other way -3.2% (n=12) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 40 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 |
|---|---|---|---|---|---|---|
| USDJPY USDJPY | LONG | +1.7% · 5d +0.6% | 83% | 36 | 0.61 | ✓ matches cascade |
| 10y yield DGS10 | LONG | +22bp · 5d +6bp | 80% | 40 | 0.55 | ✓ matches cascade |
| 30y yield DGS30 | LONG | +19bp · 5d +5bp | 78% | 40 | 0.50 | ✓ matches cascade |
| CNY CNY | SHORT | -0.6% · 5d -0.2% | 76% | 36 | 0.49 | ✓ matches cascade |
| KRW KRW | SHORT | -0.9% · 5d +0.0% ↺ fades | 70% | 35 | 0.33 | ✓ matches cascade |
| GBPUSD GBPUSD | SHORT | -0.5% · 5d -0.3% | 68% | 35 | 0.28 | ✓ matches cascade |
| US dollar DXY | LONG | +0.7% · 5d +0.5% | 66% | 40 | 0.27 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.5% · 5d -0.1% | 68% | 35 | 0.25 | · |
| Volatility VIX | LONG | +2.8% · 5d -1.7% ↺ fades | 64% | 37 | 0.21 | · |
| EURUSD EURUSD | SHORT | -0.6% · 5d -0.4% | 62% | 35 | 0.18 | ✓ matches cascade |
| TRY TRY | LONG | +0.6% · 5d +2.0% | 57% | 35 | 0.11 | ⚠ differs |
| Bitcoin BTC | LONG | +2.0% · 5d -2.2% ↺ fades | 55% | 34 | 0.08 | · |
| Gold XAU | LONG | +0.7% · 5d -0.8% ↺ fades | 52% | 36 | 0.04 | ⚠ differs |
| AUD AUD | SHORT | -0.2% · 5d -0.2% | 53% | 35 | 0.04 | ✓ matches cascade |