A combination of ill-thought out comments by the new Hungarian government coupled with a surge in the Swiss franc is seeing the forint drop like a rock and is seeing CDS on Hungary explode.
Many Hungarian mortgages are denominated in Swiss francs and the sharp appreciation of the Swiss franc would likely have weighed on the forint in any event. However comments by Hungarian officials that Hungary is not far from Greece fate simply adds to the market anxiety and talk of default are not helpful. On one hand it might be posturing as it re-negotiates its IMF package. On the other hand, the heightened state of anxiety in the capital markets would seem to caution against such inflammatory comments.
The market fears another Greece situation. The new government is claiming that the prior government manipulated the data and lied about the state of the economy. Fear is taking a toll.