What if Egypt lets the pound slide past 60 to the dollar?
Letting the pound slide past 60 is the by-now-familiar Egyptian devalue-for-IMF trade: eurobonds rally on credibility (tighter EGP spreads) while import-driven CPI spikes — long Egypt USD bonds, short EGP, brace for a CBE hike. The direct rhyme is the March 2024 Ras El-Hekma-funded float and 600bp hike that rallied Egyptian eurobonds hard. The cascade's US-rates pass-through (Fed path, 30y +3bp, mortgages) is spurious; an Egyptian devaluation doesn't move the US curve. Local credit-up / FX-down is the trade.
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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 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. Loading the probability audit trail…
What it would mean
If this plays out, it is a mixed shock. Cairo lets the pound slide past 60/USD under renewed IMF pressure, sparking a eurobond rally but import-driven CPI spike. The trigger decomposes into signed root‑shocks — FX carry appetite ▲ · Credit spreads ▼ · Inflation surprise ▲ · EM currencies ▼ — which propagate through our causal graph to the markets below.