Political risk is back in Turkey. How should markets be reading these pretty significant political domestic adjustments?

This is Erdogan playing managing domestic politics as he's so used to do. This time around it seems a little bit less stressful. This is internal CHP politics. Erdogan has managed a situation where the opposition is in internal fighting. The interesting angle is that Erdogan could possibly go to early elections.

What are the ramifications on the central bank? Bloomberg Economics has priced out rate cuts and is now anticipating 300 basis points worth of tightening.

That may not happen. The central bank and the government will manage markets. They've got plenty of reserves, 160 billion of gross reserves, they'll use them to defend the currency. Worst case, a little hike rates. But it's a holiday at the moment in Turkey, they have a bit of time for politics to calm down.

What is the biggest risk for Turkey and Turkish assets right now? Is it domestic politics or the energy shock from Iran?

Energy is bad news for Turkey. Each $10 increase in the oil price costs them between 3 and 5 billion on the current account and probably 1.2% inflation. But if we see an easing of Gulf tensions, that helps Erdogan out. Turkish markets have held in pretty well despite the Gulf-Iran war scenario, reflecting that we have a good credible team, plenty of FX reserves, and they're much more orthodox than in the past.