Possible scenario
Fragmentation Backstop Returns
18% Chance
The swap-line project becomes associated with sovereign-spread management as investors focus on Italy, France and weaker euro-area funding channels. The ECB tries to distinguish the tool from outright bond buying, but markets evaluate it as part of the anti-fragmentation toolkit.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Finance -0.3%
Portfolio impact
S&P 500-0.3%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
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