Today investors may breathe a sigh of relief knowing that fears about the Greek exit from the Euro Zone were unfounded thanks to reports which showed that banks in Greece were being backed up by ECB’s Emergency Liquidity fund. Greek banks have been provided with around $127 Billion in liquidity and therefore any rumors of an immediate bank collapse, and an immediate exit from the Euro Zone has been dispelled, for the time being. Equity Markets around the world have responded positively to the news and investors are hopeful that the post-election volatility and uncertainty will give way to a new sense of optimism in the Euro Zone.

While the Euro Zone struggles to get itself out of the ground, growth in the US economy is happening, but at a much slower pace than expected.  Unemployment remains a big issue with an overall average rate of 8.1% with some states, like California, crossing 10% line. Unemployment, slow growth and an added burden of reducing government debt doesn’t quite inspire investor confidence. However, investors are still favoring US equity, bonds and even currency due to global uncertainty. Emerging markets are becoming too volatile thanks to their reliance on export led growth which in turn depends on the strength of US and Euro zone.

Investors have long cited the interdependent nature of the world economy. However, attention should also be given to how “dependent” emerging markets are on the success or failure of the Euro Zone and US economies. This should not be surprising. Emerging markets are net exporters and the developed world is a net consumer. Faltering demand from developed countries depresses prices and will make a significant impact on their GDP. Therefore, even though reading or hearing about the Euro Crisis or the US economy on a constant basis for months might give you a headache, it is important. What effects demand affects exports and the price of industrial commodities is affected by shocks in demand for exports.