Possible scenario
Volatility Is Contained
35% Chance
French officials and regulators prevent the CDS move from becoming a broader funding shock. Investors still demand a risk premium, but the market treats the Frexit pricing as an extreme tail rather than the base case.
Initial impacts
- Riskier companies' borrowing costs Down
- Market volatility Down
- 10-year Treasury yield Up
- US dollar Down
Secondary impacts
- Finance +1.8%
- Industrials +0.9%
Portfolio impact
S&P 500+1.0%
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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