What if EM local-currency debt outperforms hard-currency as USD softens?
A weaker dollar and falling DM rates drive EM local-currency bonds to outperform hard-currency debt, drawing carry-seeking inflows and strengthening EM currencies.
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. A weaker dollar and falling DM rates drive EM local-currency bonds to outperform hard-currency debt, drawing carry-seeking inflows and strengthening EM currencies. The trigger decomposes into signed root‑shocks — EM currencies ▲ · FX carry appetite ▲ · Dollar/reserve confidence ▼ · 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 | ▲ +2.5% hist -8.19–+3.31% |
| 2 | Turkish lira TRY 📈 chart | FX | ▲ +1.4% hist -7.52–+1.44% |
| 3 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▲ +1.4% hist -0.8–+2.21% |
| 4 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▲ +1.3% hist +0.33–+1.05% |
| 5 | Indian rupee INR 📈 chart | FX | ▲ +1.2% hist -1.09–+0.65% |
| 6 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▲ +1.1% hist -1.18–+1.36% |
| 7 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▲ +0.9% model prior · unmeasured |
| 8 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▲ +0.8% hist -5.54–+5.16% |
| 9 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▲ +0.9% hist -4.12–+3.84% |
| 10 | Chinese yuan CNY 📈 chart | FX | ▲ +0.7% hist -0.23–+0.24% |
| 11 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▼ -0.6% hist -0.38–-0.16% |
| 12 | Aussie dollar AUD 📈 chart | FX | ▲ +0.6% hist -0.68–+0.59% |
| 13 | EUR/USD EURUSDon Hyperliquid 📈 chart | FX | ▲ +0.5% hist -0.84–+0.66% |
| 14 | 30y Treasury yield DGS30 📈 chart | Rate | ▲ +4bp hist -6.0–+3.59% |
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 |
|---|---|---|---|---|---|---|
| TRY TRY | SHORT | -6.6% · 5d -0.7% | 78% | 18 | 0.53 | ⚠ differs |
| INR INR | SHORT | -1.4% · 5d -0.4% | 72% | 18 | 0.42 | ⚠ differs |
| CNY CNY | SHORT | -0.4% · 5d -0.4% | 78% | 18 | 0.42 | ⚠ differs |
| SOL SOL | SHORT | -0.3% · 5d -5.7% | 75% | 8 | 0.39 | ⚠ differs |
| COIN COIN | SHORT | -5.1% · 5d -0.7% | 71% | 7 | 0.37 | ⚠ differs |
| High-yield credit HYG | SHORT | -0.5% · 5d +0.0% ↺ fades | 67% | 18 | 0.26 | ⚠ differs |
| MSTR MSTR | SHORT | -8.3% · 5d -4.6% | 65% | 20 | 0.23 | ⚠ differs |
| 30y yield DGS30 | SHORT | -7bp · 5d -2bp | 63% | 31 | 0.21 | ⚠ differs |
| AUD AUD | SHORT | -0.9% · 5d -0.8% | 61% | 18 | 0.20 | ⚠ differs |
| EURUSD EURUSD | SHORT | -1.1% · 5d -1.0% | 61% | 18 | 0.18 | ⚠ differs |
| GBPUSD GBPUSD | SHORT | -0.3% · 5d -0.6% | 61% | 18 | 0.18 | ⚠ differs |
| US dollar DXY | SHORT | -0.1% · 5d +0.2% ↺ fades | 58% | 33 | 0.16 | ✓ matches cascade |
| 10y yield DGS10 | SHORT | -8bp · 5d -3bp | 60% | 33 | 0.15 | ⚠ differs |
| ETH ETH | SHORT | -6.6% · 5d -5.8% | 60% | 10 | 0.13 | ⚠ differs |