What if a deep euro-area recession sharply widens investment-grade credit spreads?
Euro-area IG spreads widen sharply under the ECB/EBA 2025 adverse scenario as a deep recession and energy relapse repriced corporate credit risk across the bloc.
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 risk-off shock. Euro-area IG spreads widen sharply under the ECB/EBA 2025 adverse scenario as a deep recession and energy relapse repriced corporate credit risk across the bloc. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · European energy ▲ · Financial conditions ▲ · Recession signal ▲ · 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 | ▼ -2.3% hist -4.16–+0.29% · other way +25.6% (n=12) |
| 2 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -1.8% hist -15.43–+7.06% · other way -1.05% (n=11) |
| 3 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -1.4% hist -1.4–-0.19% · other way +0.22% (n=12) |
| 4 | High-yield credit HYG 📈 chart | Rate | ▼ -1.3% hist -0.7–-0.23% · other way -0.06% (n=12) |
| 5 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -1.3% hist -3.44–+1.08% · other way +7.35% (n=11) |
| 6 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -1.3% hist -3.24–+1.04% · other way +4.96% (n=11) |
| 7 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -1.3% model prior · unmeasured |
| 8 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +1.3% hist -0.29–+2.29% · other way -10.27% (n=12) |
| 9 | Financials XLF 📈 chart | Equity | ▼ -1.1% hist -1.49–+0.0% · other way +0.51% (n=12) |
| 10 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.9% hist -1.13–-0.08% · other way -0.94% (n=12) |
| 11 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▼ -0.8% hist -6.86–+7.23% · other way +22.29% (n=11) |
| 12 | Tech sector XLK 📈 chart | Equity | ▼ -0.8% hist -0.68–+0.25% · other way +0.23% (n=12) |
| 13 | JPMorgan JPM 📈 chart | Equity | ▼ -0.7% hist -1.91–+0.16% · other way +1.31% (n=12) |
| 14 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -0.6% hist -0.75–+1.74% · other way +0.78% (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 |
|---|---|---|---|---|---|---|
| High-yield credit HYG | SHORT | -0.2% · 5d -0.3% | 73% | 26 | 0.45 | ✓ matches cascade |
| SOL SOL | SHORT | -14.3% · 5d -13.1% | 86% | 7 | 0.44 | ✓ matches cascade |
| JPM JPM | SHORT | -1.4% · 5d -1.9% | 69% | 36 | 0.34 | ✓ matches cascade |
| CL CL | SHORT | -1.8% · 5d -2.0% | 67% | 30 | 0.28 | ✓ matches cascade |
| COIN COIN | LONG | +8.6% · 5d +6.1% | 67% | 6 | 0.26 | ⚠ differs |
| AVGO AVGO | LONG | +3.5% · 5d +0.1% | 63% | 19 | 0.23 | ⚠ differs |
| Bitcoin BTC | SHORT | -2.6% · 5d -4.5% | 64% | 11 | 0.22 | ✓ matches cascade |
| SMH SMH | LONG | +1.8% · 5d -0.3% ↺ fades | 63% | 30 | 0.22 | ⚠ differs |
| MSTR MSTR | SHORT | -2.8% · 5d -3.2% | 63% | 30 | 0.21 | ✓ matches cascade |
| AUD AUD | SHORT | -0.7% · 5d +0.1% ↺ fades | 61% | 28 | 0.21 | ✓ matches cascade |
| XLF XLF | SHORT | -0.9% · 5d -1.4% | 60% | 30 | 0.18 | ✓ matches cascade |
| 10y yield DGS10 | SHORT | -12bp · 5d -3bp | 60% | 40 | 0.17 | · |
| NVDA NVDA | LONG | +3.7% · 5d -2.1% ↺ fades | 60% | 30 | 0.16 | ⚠ differs |
| ASML ASML | SHORT | -1.2% · 5d -2.0% | 60% | 30 | 0.16 | ✓ matches cascade |