Emerging-market central banks seem determined to limit the appreciation of their currencies caused by the hot-money inflows derived from QE. Bloomberg reports that the Brazilian central bank intervened in the currency yesterday.

This should be supportive of my risk-on trade. From the Bloomberg report:

“It’s not fun anymore,” said Alejandro Urbina, an emerging-market debt manager in Chicago at Silva Capital, which helps oversee $800 million in assets. “The ongoing commitment by the government to currency intervention limits our interests in the real.”

If traders lose conviction in the EM currency trade, where is the money created by QE going to go? Equities and commodities.