Three ETFs To Watch This Week: FXE, KROO, UNG

by on December 5, 2011 | ETFs Mentioned:

This past week was marked by strong markets that sent November out with a bang. The good news started with strong Black Friday sales despite worries that a slow economy would scare consumers away from using their discretionary income. Next came the news that leaders of the euro zone were hard at work for a new plan to help boost its economy; a plan that won’t involve printing money according to German Chancellor Angela Merkel. Later, it was announced that a number of central banks from all over the world collaborated to lower dollar cost funding through swap arrangements, thereby making it easier for them to borrow from each other. Finally, the week closed out with unemployment down to 8.6%, the lowest in over two years. A robust week to say the least. Now the question is whether or not we can stay about our winning ways as a global economy [see also November ETF Roundup: Launches, Filings, and Closures].

With last week bringing such positive news and data for markets, we outline three ETFs to keep an eye on as the coming week unfolds:

CurrencyShares Euro Currency Trust (FXE)

Why It Will Be In Focus: Even if you were to ignore all of the upcoming data this would still be an important fund to watch. With news emerging on a daily basis of how European leaders are handling this crisis, FXE has been vaulting back and forth. But throw in some of the figures to be reported this week, and you set the stage for an important string of trading sessions for FXE. The week starts with euro-zone retail sales and quickly moves into GDP the following day. As if that wasn’t enough, later in the week will see the ECB’s rate decision which always has the potential to be a big mover for the euro. To top everything off, Friday will see German CPI, closing out what should be a very active week for this fund [see also Euro Bond ETFs: Big Yields, Big Risks].

IQ Australia Small Cap ETF (KROO)

Why It Will Be In Focus: This ETF measures the small cap market in Australia. The fund has just $18 million in assets and an average daily volume of about 11,400, putting it on “death watch” by many standards. But the coming week will certainly see a jump in trading volume and activity in the ETF. This week will see a slew of data releases from down under, including central bank rates, GDP, and the unemployment rate. By Friday, most investors will have a pretty good idea of how the Australian economy has been performing as of late and KROO will be one of the main tools for establishing exposure [see also ETF Misnomers: Why You Never Judge A Fund By Its Cover].

United States Natural Gas Fund LP (UNG)

Why It Will Be In Focus: Natural gas has been one of the most talked about commodities as of late, as the fuel has been under enormous pressure. Recently, inventories in the U.S. hit an all time high as mild weather has curtailed demand for this energy source. Though this week saw an unexpected dip in stockpiles, prices still remain low as inventories are above their five year average. But now that we have moved into December and cooler weather is on its way, UNG could be on the verge of a nice breakout. Note that the fund will still be extremely volatile, but when winter comes our way, UNG will likely experience some relief and produce some nice gains for investors [see also 25 Ways To Invest In Natural Gas]. 

Disclosure: Photo courtesy of Eric Chan. No positions at time of writing.