Photo: Retuers, Issei Kato

Emerging market currencies rose from Friday morning to Monday morning although stock market indices fell.

When investors want to eliminate risk the first thing they usually jettison is emerging market currency positions. Yet the JPMorgan Emerging Market Currency Spot Index jumped from 68.4 to 68.8 between Friday morning and now.

That gain is not quite as large as the rise in the Japanese yen or the Euro, but it’s substantial. The strong bid for EM currencies reinforces our belief that world trade is in recovery mode.