Koon Chow

It's quite a bearish global market environment, there are concerns about global growth given the increase in trade tensions ... manifesting in punishment of currencies or countries that are open and do a lot of trade with the U.S. and China.

The main concern is that this would be negative for trade flows, and that would have spillover effects for U.S. and Chinese demand for goods from other countries as well, so there are concerns it will have negative repercussions for global growth.

The biggest contributor is fear of a euro zone crisis, and the spillover from that into demand for safe-haven currencies.

Some of the price action looked like an over-reaction, for example in the Russian bonds, so you get people buying it back, if anything, the geopolitical developments will strengthen Russian policymakers' resolve to run a very conservative economic policy, which means your economy is less vulnerable to geopolitical-related developments.

If you put on some risk premium that's another 50-100 bps so that's 350 bps-plus, when you look at the historical relationship between CDS and currency and extend Turkish CDS to 350, it implies dollar/lira at 3.2 (per dollar).

Because of what they've done, getting households to repay Swiss franc loans early, providing them with a hedging mechanism the adjustment cost has been priced in and hedged, it's been a vindication of Hungary's intent.