Economic Expectations Rise for the Third Consecutive Month

The ZEW-CS Indicator for the economic sentiment in Switzerland continues to
improve in November 2016. Compared to the previous month, it increased by
3.7 points to a current reading of 8.9 points. This marks the third
successive rise of the indicator. In contrast, the assessment of the
current economic situation in Switzerland deteriorates: the corresponding
indicator declines by 3.2 points to a level of 14.7 points. Almost three
quarters of the surveyed experts expect the economic development to remain
unchanged within the next six months. Furthermore, a large majority of 85
per cent of the respondents considers the current economic situation to be
"normal".

The ZEW-CS Indicator reflects the expectations of the surveyed financial
market experts regarding the economic development in Switzerland on a six-
month time horizon. It is calculated monthly by ZEW, Mannheim, in
cooperation with CS, Zurich.

Economic expectations for the eurozone are improving in a similar way as
they do for Switzerland, with a rise of 4.4 points to a level of 12.5
points. The indicator regarding the US economy, by contrast, drops by 16.4
points to a current reading of 18.7 points. One possible reason for this
assessment may be the result of the US presidential election, which took
place during the survey period. Quite a different picture emerges when
considering the stock markets: the indicator for the development of the S&P
500 rises by 26.2 points to a reading of 37.5 points. This is the largest
increase of the indicator since the question about US stock market
expectations has been first introduced into the survey in 2008. For the SMI
in Switzerland and the STOXX 50 in the eurozone the indicators also
increase substantially, by 19.6 points and 16.6 points, respectively.

The difference between analysts expecting a rise in inflation rates in
Switzerland and analysts expecting inflation rates to decline can be used
to measure inflation expectations. In the current survey this difference
has risen by 10.6 points to a reading of 61.8 points. For the eurozone and
the USA these indicators have increased as well. Hence, the trend of
growing inflation expectations from the previous months continues. Against
this backdrop, the development of short-term interest rates appears
plausible: in all three economic regions, the corresponding indicators rise
by approximately ten points.

More detailed results – including survey participants' assessment of
developments in other countries – can be found in this month's edition of
the "Switzerland Financial market report" (please note that the URL is case
sensitive): http://www.zew.de/zew-cs-financialmarketreport

You can find a data sheet with the complete results of the survey in the
attached PDF-file.

For further information please contact:

Markus Teske (ZEW), Phone +49 (0)621 1235-372,
E-mail teske@zew.de

Lukas Gehrig (Credit Suisse), Phone +41 44 333 52 07,
E-mail lukas.gehrig@credit-suisse.com