Given that commodities are for the most part priced in USD, it follows that stronger USD weighs on commodity prices, and vice versa. As we can see from the first chart below, the long-term correlation of monthly price changes between the CRB Index and the USD is -.85. This relationship also has implications for many EM countries, since EMs tend to be large commodity producers and thus generally subject to the pro-cyclical nature of commodity prices. It is thus not a surprise to see that the USD has a highly negative correlation with emerging market stock prices (2nd chart below) and that commodity prices and EM stock prices tend to have a highly positive correlation (3rd chart below). With that being said, we find the recent divergence between EM stock prices and the CRB Index curious and would expect to see the long-term correlation reassert itself in the weeks and months to come.