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Amid all of the issues plaguing Europe, the U.K. has been struggling to find its footing, despite isolating itself from the flailing currency. The U.K. has been faced with high unemployment rates and a shrinking economy for some time now, as fourth quarter GDP recently came in at an unimpressive -0.2%. Though the British equity market would like to get back on track, many analysts agree that it could be years before things start to look up. But for now, economic data and guidance will provide key insight on how well the economy is performing and what it may do in the future.

Today will see a major economic indicator from the U.K. as jobless claims for the month of February will be officially released. Last month’s report left something to be desired, as “U.K. jobless claims rose more than economists forecast in January and unemployment held at the highest rate for 16 years in the fourth quarter as the economy contracted” writes Scott Hamilton. Lowering unemployment is key to any economic recovery and that process starts by lowering jobless claims for the country.

Unfortunately for the U.K., today’s report is slated to come in higher than last month, with jobless claims expected to jump to 5,000 for the month. Just to be clear, jobless claims are defined as those who have filed for unemployment benefits, but are actively seeking a job. If the report comes in higher than expected, look for U.K. equities to take a dive on the day, but a lower than expected report could spark signs of an economic recovery, which would likely give tailwinds to British markets.

In light of this major report, today’s ETF to watch will be the MSCI United Kingdom Index Fund (NYSEARCA:EWU). This ETF, which was brought to market in 1996, tracks the performance of British equities with big name holdings like Vodafone (NASDAQ:VOD), Rio Tinto (RTP), and BHP Billiton (NYSE:BHP) making their way into the top securities of the product. EWU has enjoyed a relatively strong year, gaining more than 7% while maintaining a handsome dividend yield. A miss in jobless claims will likely be this fund’s demise, but a surprise dip will give traders an opportunity to profit from long positions in EWU.

Disclosure: No positions at time of writing.

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Source: Wednesday's ETF To Watch: MSCI United Kingdom Index Fund