Emerging markets were up in line with US stocks last week. There was also a bit of positive reaction to the ECB committing to buy government bonds. A move that should support the economies of some emerging markets along with the markets that consume products produced in these places. The typical inverse relationship held up and VXEEM dropped from 22.71 to 21.17 or about 7% last week. Futures prices acted in a typical manner as well, dropping, but not nearly to the extent of the drop in the spot index.
Brazil, based on the EWZ exchange traded fund was slightly higher last week gaining 0.30%. VXEWZ dropped by over 6% based on the rise in the market. This drop in volatility may also have a forward looking component to it. This week may be an interesting week for EWZ and VXEWZ as a rate cut is on the horizon this coming Wednesday.