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European worries have plagued equities the last few weeks, as Ireland received an official bailout nearing $100 billion. But just as it seemed Ireland was making the move toward stability, news of Portugal’s worsening debt crisis has lead many to suspect a bailout for that country as well. Needless to say, all of the worries over these countries possibly defaulting has put downward pressure on stock markets and the euro zone in general. This trend was finally shaken yesterday as U.S. markets turned in a solid session with the Dow surging 250 points on more optimistic economic data. However, this brief surge could all be for nothing given the shifting focus back across pond to Europe as the ECB releases key data.

Today, the Euro-zone will be releasing its decision on its benchmark rate and will also likely comment on the debt crisis that is quickly spreading throughout Europe. Virtually all economists believe that the bank will hold rates steady, as the ECB is generally transparent in its plans involving interest rates hikes or cuts and is generally committed to price stability across the euro zone. The ECB’s goal is to maintain inflation of 2%, and the bank believes it can do that by holding rates at 1%, they same they were last quarter. With interest rates unlikely to move, the real movement will come from Trichet’s comments about the debt crisis and growing speculation over a bond buying program. While the idea of buying up sovereign debt remains controversial across the euro zone, many are arguing that the bank has to do something in order to boost confidence in the sagging common currency. “To some extent the ECB is being held hostage by financial markets,” said Juergen Michels, chief euro-region economist at Citigroup Inc. in London. “As the existing measures are unlikely to be sufficient to solve the problems in the periphery, the ECB probably will be forced to increase its programs substantially.”

Also today, the Euro-zone’s third quarter GDP will be released, another key economic indicator for the various nations across Europe. GDP is a measure of the total value of all goods and services produced by the Euro-zone, and gives key insight into what is driving an economy. Because the third quarter is long over, and the data used to calculate GDP is available well before the Euro-zone releases their official figure, the results are typically well anticipated. This saves markets from dealing with a surprise that sometimes crushes equities, as the predicted GDP typically matches the actual result. This most recent quarter’s GDP is expected to come in at 0.4%, the same as the second quarter of 2010.

With these two key data releases, the iShares MSCI EMU Index Fund (NYSEARCA:EZU) will be today’s ETF to watch. This fund tracks the MSCI EMU Index, which measures the performance of equity markets of the EMU member countries: those members of the European Union who have adopted the Euro as its currency. France (31%) and Germany (25%) receive the largest weightings by country, and the majority of the funds assets are dedicated to giant or large cap firms. This ETF has lost 9.53% on the year, with the last four weeks being especially negative. EZU, though, is able to boast a handsome dividend of 4.4%. While today’s reports seem to have solid predictions in place, a change in either figure could send this ETF soaring or plummeting depending on how the data comes in.

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Disclosure: No positions at time of writing.

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