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On Tuesday, European equity markets surged higher with the main indexes in Britain, France, and Germany all jumping by more than 2% on the day. However, a lackluster end to trading in the U.S. is likely to set a negative tone for Asian and European markets this morning. While this first full week of July is short on economic news, there are a few key items coming out of Europe that could either relieve or escalate investor anxiety. Coming off an extremely poor quarter for many European economies, many investors are hoping the continent can get off to a fast start in the second half. Investors will focus on today’s data in order to evaluate the effects of the sovereign debt crisis on the euro zone as a whole as well as two of the area’s largest economies: France and Germany.

Among the most crucial pieces of data coming out today are figures regarding the euro zone GDP (both year over year and quarter over quarter) as well as euro zone household consumption numbers. GDP numbers are expected to rise modestly, with year-over-year numbers approaching a gain of 0.6%. However, household consumption is projected to fall by 0.1% compared to the previous quarter; if confirmed, this would suggest that citizens in the euro zone are cutting back in preparation for harsher austerity measures.

In France, CPI numbers are scheduled to be released along with the French trade balance, which is predicted to fall to a deficit of 3.9 billion euros in May. Meanwhile, across the Rhine, Germany will report data on factory orders, which could signal the demand for German goods in this tough economic environment. Although both the month-over-month and year-over-year numbers are expected to decline, it will be interesting to see if the fall in the value of the euro has helped to bolster demand for German-made products.

For these reasons, look for the iShares MSCI EMU Index Fund (NYSEARCA:EZU) to be in focus during today’s trading session. The fund, which tracks the MSCI EMU Index, measures the performance of equity markets of the European Monetary Union member countries, and could be volatile today trading given the slew of data releases regarding not only the EMU as a whole but information on two of the continent’s largest and most important economies. EZU holds 270 securities in total and allocates just 25% to its top ten holdings, suggesting that the fund is very spread out and more likely to be influenced by macroeconomics rather than the events regarding a few large companies.

The fund is heavy in financials (25%), industrial materials (15%), and consumer goods (14%) while remaining light in hardware, software, and media sectors, which combine to make up just 5% of total assets. In terms of individual countries, France and Germany make up the bulk of the exposure, combining for more than 55% of the fund’s total assets. Spain and Italy also receive double-digit allocations, while minimal weightings are given to the Low Countries as well as Austria and Ireland. Like many European funds, EZU is down sharply for 2010, having posted a loss of more than 20% thus far on the year. The fund looks to remain active today after the data releases as investors focus in once again on the troubled region.

Disclosure: No positions at time of writing.

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Source: Wednesday’s ETF to Watch: iShares MSCI EMU Index