Possible scenario
Regional Spillover
20% Chance
The conflict spreads beyond a strictly Ethiopian internal battlefield through Eritrean involvement, cross-border supply channels or disruption near the Djibouti corridor. This is the scenario with the clearest potential to register in global risk assets and energy prices, though still far below a major Middle East war shock.
Initial impacts
- Market volatility Up
- Riskier companies' borrowing costs Up
- Oil prices Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Energy +0.5%
Portfolio impact
S&P 500-0.7%
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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