This past week I made a couple of presentations on behalf of the Australian Securities Exchange (ASX) in Melbourne and Sydney. The ASX is in the process of developing and offering futures contracts based on the S&P / ASX 200 VIX Index. I was able to use some examples of volatility behaving differently for different markets and one of my examples was the VXEWZ closing curve on 5/31/2013 (the red line on the bottom right chart). The Brazilian market was under pressure the week of the 31st and the result was a 30% move in the index along with 15% move higher in the June contract. I commented that it appeared this move in the futures had the appearance that traders expected more upside in VXEWZ over the near term. The June contract was at a discount, but the flat shape of the curve on the 31st had the appearance of a volatility market that was expected to go higher. Well, it did last week. There was a rating downgrade for the Brazilian markets and the result was another drop of over 2% in the EEM, a 6% rally in VXEWZ and the June future up another 7%. The curve shape didn’t change too much. Could be more volatility is expected over the near term. EEM was lower as well, dropping just over 1% with VXEEM up 2.7% and the front month future rising over 3%.