Don't let it get away!
Keep track of the stocks that matter to you.
Help yourself with the Fool's FREE and easy new watchlist service today.
Last week saw a flurry of data from the U.S. market that signaled to many that the country's economy was slowing down. Unemployment was up and manufacturing and sales were both lower, suggesting that the economy was being hit on all sides. Luckily, the U.S. market can take a breather this week thanks to a lack of key data reports as the focus shifts to international markets instead. A number of central banks will be meeting this week across the developed and emerging world with the ECB, the Bank of England, Bank of Brazil, the Reserve Bank of New Zealand as well as the Reserve Bank of Australia all giving their decision on rates over the next few days. Kicking things off from this important group is Australia which looks to give its decision on interest rates later today.
The Australian rate decision should be an interesting one as it could potentially signal the bank's policy for the rest of the year. The central bank has kept rates on hold since November of 2010 when it hiked the benchmark rate by 25 basis points up to 4.75%. Many are looking for another increase thanks to some comments by the RBA in May, but thanks to the recent GDP report -- which showed that the Aussie economy contracted by 1.2% in the most recent quarter -- most have delayed their estimates for the next hike until August [Highlighting Five Free ETF Tools].
Thanks to this key meeting, investors should look for the IQ Australia Small Cap ETF (NYSE: KROO ) to remain in focus throughout today's trading session. The fund tracks the IQ Australia Small Cap Index which is a market cap-weighted index that seeks to provide investors with a means of tracking the overall performance of small cap Australian companies. The fund has struggled so far in 2011 and has lost 3.3% so far this year including a 3% slump in the past two weeks alone. This is largely thanks to the aftereffects from the bad weather earlier in the year as well as slumping commodity prices across the board. Nevertheless, the fund is up almost 43% over the past 52 week period and could return to such high levels of returns if the economy begins to pick up again soon.
Should the central bank signals optimism despite the growing cloud of worry in many of the other developed markets, KROO could rise on the day and put the fund back on track to the gains it saw late last year. If, however, the central bank expects more weakness either as a result of the slowdown in Europe and the U.S., or as result from the natural disasters that impacted the country earlier in the year, look for this small-cap fund to tumble in Tuesday trading [Seven ETFs To Invest Like Peter Schiff].
[For more ETFs to watch sign up for our free ETF newsletter.]
More from ETFdb.com:
Disclosure: No positions at time of writing.
ETF Database is not an investment advisor, and any content published by ETF Database does not constitute individual investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. From time to time, issuers of exchange-traded products mentioned herein may place paid advertisements with ETF Database. All content on ETF Database is produced independently of any advertising relationships. Read the full disclaimer here.