ZEW-CS Financial Market Test Switzerland - Economic Expectations for Switzerland Edge Down

According to the Financial Market Survey Switzerland, economic expectations diminished somewhat in July. In the wake of continuously climbing in the first half of 2009, the relevant ZEW/ Credit Suisse indicator edged down by 9.7 points, reaching the neutral threshold of zero. The indicator for the assessment of the current economic situation dipped slightly below the previous month's mark in July, down 2.5 points to the minus 70.2 level. The Financial Market Test Switzerland is carried out monthly by the Centre for European Economic Research (ZEW) in cooperation with Credit Suisse.

Regarding short-term interest rates, 89.3 percent of analysts forecast rates holding steady on a six-month horizon. On the other hand, inflation expectations declined compared with the June reading, with the corresponding balance dropping by 20.5 points to the 2.1 level. Although 55.6 percent of the financial market experts continue to predict that the Swiss Market Index (SMI) will gain terrain, the relevant indicator lost ground by 17 points in the July survey and now stands at the 37.8 mark.

The survey process and methodology

The ZEW has conducted a similar monthly survey for Germany since 1991. The aim of the Swiss survey is to develop indicators both for Switzerland's general economic climate as well as for the Swiss services sector.

Specifically, survey participants are asked to give their medium-term expectations for important international financial markets as regards the development of the economy, the inflation rate, short- and longer-term interest rates, equity prices and exchange rates. In addition, the financial experts are also asked to assess the earnings situation of companies in the following Swiss services sectors: banks, insurance, consumer/retail, telecoms and services as a whole.

The results represent the net difference between the percentage of positive and negative responses. Figures in parentheses show the changes for each indicator compared to the previous month.

Contact

Dr. Gunnar Lang (ZEW), Phone: +49/621/1235-372, E-mail: lang@zew.de

Fabian Heller (Credit Suisse), Phone: +41/44/3329061, E-Mail: fabian.heller@credit-suisse.com