Declines in emerging market currencies and other financial markets in EM have been a big driver of investor angst so far this year. Since April 18th, our equally-weighted index of EM currency performance versus the US dollar has dropped 11.8%; adjusted for interest rate differentials, it’s a slightly less painful but still large 9%. Despite global equity market weakness this week, EM currencies are starting to break out of their downtrend. While still tentative, a shift in trend to sideways price action instead of persistent declines would be a big deal for global asset markets, especially for equity markets outside the US.