Steady German stock markets and interest rates forecast

According to the Centre for European Economic Research (ZEW) bank experts forecast steady stock markets and interest rates for Germany. In the six months to come share prices at German and European stock exchanges will develop cautiously. Even though, according to experts, short and long-term interest rates will rise, this increase will just be a slight one. This is the finding of a quarterly survey by the Mannheim-based ZEW among financial market analysts from German banks.

Experts think that short-term interest rates (three-months-Euribor) are going to rise by 17 basis points on average by the middle of 2007 to 4.09%. With regard to long-term interest rates they do not expect virtually any change at all over the same period. According to banks, in the six months term the short and long-term interest rates will rise to 4.11% and 4.12% respectively and will thus keep being virtually at the same level.

The situation is similar with regard to stock markets. By the middle of this year analysts expect just small price changes at German and European stock exchanges. Thus, the institutes participating in the survey forecast a slight decrease in the DAX to 6.869 points and just a slight increase in the DJ Stoxx 50 to 3.763 points by the middle of 2007. The Tec-DAX is considered to remain unchanged over the next three months at 843 points.

In the opinion of the analysts questioned the price of the Euro against the US dollar is not going to change considerably in future. In the three months and six months term they expect a price of 1.33 US dollar per Euro.

Further details are available from the ZEW. GERMAN