Financial Market Report Switzerland

The Financial Market Report Switzerland is carried out on a monthly basis by ZEW and Credit Suisse. It displays the expectations of financial experts for four important international financial markets.

These experts are questioned about their medium-term expectations for the development of the macroeconomic trend, the inflation rate, the short-term, commodity prices and long-term interest rates, the stock market and the exchange rates. The survey deals with the markets of Switzerland, the Eurozone, the United States and China.

Special questions will also survey the financial market experts on a three-month basis concerning long-term expectations and asset prices.

The financial experts give qualitative assessments of their expectations. This means, that they only judge, for example, whether the long-term interest rates will rise (+), fall (–) or stay approximately the same (=) within the next 6 months. The limitation to qualitative questions is justified by the need for an efficient and quick answering procedure. The participants are required to respond by fax or mail within a period of approximately fourteen days.

As an exclusive service the participants receive the aggregated results together with a short analysis within three to four working days of the deadline.. The detailed analysis of the results, including a graphical presentation, is sent in the form of the ZEW CS Financial Market Report Switzerland together with the next questionnaire.

At first the individual forecasts of the financial experts are aggregated into categories. For many purposes it is necessary to describe the distribution of the responses with a single value. This value can then be interpreted as the mean expectation of the respondents. In most cases the balance s=(p–m) of the relative frequencies p of the positive categories (+) and the relative frequencies m of the negative categories is used. By encrypting the categories as +1, 0 and –1, the balance is the mean of the responses. (See: Marnet, Volker (1996): Eigenschaften und Bestimmungsfaktoren von Finanzmarkterwartungen– Eine theoretische und empirische Analyse unter Verwendung der ZEW-Finanzmarkttestdaten, 1. Auflage, Nomos Verlag, Baden-Baden.)