What if Ethiopia's stalled eurobond default deepens?
Ethiopia's stalled lone-eurobond restructuring with Common Framework deadlock keeps the defaulted bond depressed and feeds frontier cross-default fear — short the Ethiopia 2024 note, widen the weakest African HY (Zambia, post-default names). The rhyme is Zambia's multi-year Common Framework saga that froze its curve. Ethiopia is funded by China (its largest bilateral creditor) and the IMF; Beijing-Paris Club coordination is the binding constraint. The US-tech-led cascade misses that this is an African-frontier sovereign-credit contagion story.
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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 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. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. Addis Ababa's lone 2024 eurobond restructuring stalls, G20 Common Framework deadlock triggers cross-default fears. The trigger decomposes into signed root‑shocks — FX carry appetite ▼ · Credit spreads ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.