Financial markets in parts of the region have been hit by a fresh wave of investor risk aversion over the past month. In Turkey, a surge in inflation coupled with a deterioration in the political outlook has hit equities, bonds and the currency markets. The Central Bank has not helped matters by choosing to abandon its inflation target. Meanwhile, markets in the Ukraine have also been hit by a similar cocktail of soaring prices and weak government. S&P have issued a ratings downgrade and we expect other agencies to follow suit over the coming months.