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After last week’s bullish run, investors are anxiously waiting to see if we are due for a pullback, or if the bull train will continue at full speed. This week will be relatively quiet, although U.S. markets will likely be very active today as Ben Bernanke is set to testify before congress. Bernanke’s commentary, or lack thereof, on a third quantitative easing program will surely be a big market mover at home. Overseas, there will be other things to focus on, like major economic reports that shed light on how particular areas of the world have been performing [see also 5 Best Performing Commodity ETFs Over The Last 3 Years].

Today will see CPI results from the U.K. for the month of February. Unfortunately, the economy across the pond has been faced with a number of headwinds as of late, as the euro crisis has been putting pressure on the British. Analysts are predicting today’s report to show a dip in inflation, bringing it to 15 month lows based on a number of overarching factors. “The easing rate of inflation will be welcomed by households who were squeezed by high inflation and sluggish wage growth throughout 2011 and will add further weight to the Bank’s decision to pump an extra £50 billion into its quantitative easing programme” writes Jamie Grierson.

Analysts are predicting today’s report to come in a 3.3%, down from 3.6% the month prior. Investors should note that CPI results have either matched or come in lower than analyst expectations for the past four months, as CPI has been on a sliding slope for this economy. It is difficult to predict how markets will move based off of just the result, as both a drop and rise have their pros and cons. Commentary provided and a future outlook may be the most significant aspect of today’s data and investors would do well to pay attention to it [see also How To Play A Treasury Bubble With ETFs].

In light of this major economic indicator, today’s ETF to watch will be the MSCI United Kingdom Index Fund (NYSEARCA:EWU). EWU tracks the performance of the British equity market and has just over $1.5 billion in total assets. Top holdings of the fund include multi-national firms like Royal Dutch Shell and BHP Billiton among others. The ETF is up over 9% on the year and today’s report will weigh heavily on that figure. A negative report will likely sink EWU for the day, while a positive spin to things may give more tailwinds to EWU’s impressive 2012 performance [see also King Dollar ETFdb Portfolio Now Available].

Disclosure: No positions at time of writing.

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