The EEM as a representative of emerging market performance was slightly higher last week. In an interesting move, VXEEM was higher as well, rising over 11% on the week. Admittedly this was an unusual move to say the least, but many professional traders give as much weight (if not more) to how volatility futures are trading and in the case of VXEEM the futures were lower across the board for the week. Whatever has the option trader demanding contracts did not carry over to the futures. December is actually at a discount to the spot index which is an opportunity for those thinking of getting long volatility through the middle of December.
In the world that is volatility on the Brazilian market things behaved in a bit more normal fashion. EWZ was lower by 1.11% and VXEWZ rose over 8% on the week. This goes along with the type of inverse relationship we expect between equity market indexes and their corresponding volatility indexes. The futures curve was a textbook parallel shift on the VXEWZ chart.