ZURICH (Reuters) - The Swiss ZEW investor sentiment index rose to a four-month high in April as expectations declined that Switzerland and the neighbouring euro zone would cut interest rates again, a stance that could help financial firms.
"In April, the percentage of analysts expecting a drop in short-term rates fell sharply for both regions (Swiss and euro zone), whereas the majority of the financial analysts are expecting short-term rates to rise in the United States."
Credit Suisse (SIX:CSGN), which issues the indicator along with German think-tank ZEW, said on Wednesday.
Both the Swiss National Bank (SNB) and the European Central Bank (ECB) have implemented negative interest rates, making it less attractive for banks to store cash with central bank and encouraging them to loan it out instead. The SNB also aims to weaken the Swiss franc, which it calls "significantly overvalued," through negative rates by discouraging investors from buying it as a safe haven currency.
However, the policy is a burden on the financial industry --as banks, insurers and pension funds are charged for their deposits -- and some economists have argued it is doing more harm than good.
The ZEW barometer rose by 9.0 points in April to 11.5 points.
Most analysts projected the Swiss franc would hold steady against the euro over the next six months, with the balance tipping towards a depreciation of the franc (EURCHF=). But expectations clearly projected a drop against the dollar <CHF=>, easing some of the pressure on Swiss exports.
About a third of analysts expected long-term rates to rise in both Switzerland and the euro zone, Credit Suisse said.
Despite a brightening outlook, the overall assessment of the current economy remained slightly negative and a majority of analysts expected inflation to remain negative through 2017.