Possible scenario
Regional Spillover Escalates
15% Chance
The rupture between Addis Ababa and Asmara worsens after Ethiopia's campaign in Tigray, creating a risk of direct clashes with Eritrea. This is less likely than a contained conflict, but the presence of armed forces near disputed border areas makes miscalculation plausible.
Initial impacts
- Market volatility Up
- Riskier companies' borrowing costs Up
- Oil prices Up
- US dollar Up
Secondary impacts
- Energy +0.1%
- Consumer Services -0.1%
Portfolio impact
S&P 500-0.5%
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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