Banking and insurance company experts expect interest rates to rise this quarter and next. At the same time, they predict a rise in oil prices and a fall in the euro. These are the results of the first IW Financial Expert Survey by the Cologne Institute for Economic Research (IW). This study is a continuation of the European Center for Economic Research (ZEW)’s previous ZEW-Prognosetest.
On average, experts from 14 financial institutions surveyed expect interest rates on 10-year German government bonds to rise from the current 0.34% to 0.56% by the end of September. In addition, they predict an increase in money market interest rates. Furthermore, we expect oil prices to rise by 3.1% by the end of the third quarter of 2017.
The stock market is expected to remain calm. Forecasts for the European Stoxx 50 and the German stock index DAX suggest mild losses at worst. Looking at the outlook for the euro, it is clear that the euro is depreciating against the US dollar. Experts expect Europe’s single currency to depreciate by an average of 2.3% by the end of the third quarter of 2017.
Since 2001, ZEW has been investigating financial institutions’ forecasts of six related economic indicators on a quarterly basis and evaluating their forecast accuracy. The IW Financial Expert Survey continues this work and methodology to achieve comparable results. “The Survey of Financial Experts is a reliable tool and should continue to serve as a reliable basis for the development of relevant financial market indicators,” said IW economist Marcus Demarie.
Professional forecasters from 14 financial institutions participated in this survey. Over the past 10 quarters, Commerzbank experts achieved the highest forecast accuracy, followed by Hamburger Sparkasse and UniCredit experts. The next IW Financial Expert Survey will be released in the first week of July.
