Possible scenario
Direct Ethiopia-Eritrea War
25% Chance
The Fatsi advance triggers direct clashes between Ethiopian and Eritrean forces, reviving the risk of an interstate war along the Tigray-Eritrea frontier. Eritrea may calculate that striking early is preferable to allowing ENDF-TPF units to entrench near its border.
Initial impacts
- Market volatility Up
- Riskier companies' borrowing costs Up
- 10-year Treasury yield Down
- Oil prices Up
- US dollar Up
Secondary impacts
- Consumer Services -0.2%
Portfolio impact
S&P 500-0.6%
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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