FIXED-INCOME AND CURRENCY RESEARCH

Forecasts and recommendations are prepared with the greatest care and taking into account all relevant facts identifiable at the time. The analysts have a high level of market and sector knowledge that allows them to make a qualified judgement, including of factors that are not quantifiable.

Various analysis methods or combinations thereof are used to derive recommendations for individual issuers, as well as for bonds, currencies or derivatives.

Fundamental analysis: Based on econometric models developed by the analysts themselves and taking into account other qualitative factors, forecasts are prepared for an issuer’s credit rating (and forecasts are derived from this for the development of the price, yield or spread of the issuer’s debt instruments) or for changes in exchange rates and interest rates. These are compared with current market prices and rates and under certain circumstances with the market’s expectations in order to prepare trading recommendations for different types of investor.

Relative value analysis: A relative value analysis makes use of mathematical and statistical methods to analyse whether a bond is to be rated as cheap or dear compared to its own history or a group of comparable bonds. Buy, sell or switch recommendations are derived from the comparison of dear and cheap bonds.

Technical analysis: Different methods are used to predict the development of a price or rate in the future based on its development in the past (chartist approach, technical indicators, Elliott Wave Theory, relative strength approaches etc.). Trading recommendations are derived from the comparison between current prices/rates and forecasts.