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Survey finds growing confidence in euro area for 2011

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Institutional investors overwhelmingly believe the euro area will be able to avoid a “full-fledged crisis,” according to Barclays Capital’s inaugural Global Macro Survey.



More than 2,000 institutional investors from around the world, including hedge funds, money managers, proprietary trading and corporate trading desks responded to the survey.

Only four per cent of clients surveyed believe that a euro area crisis and break-up of the euro currency is a likely outcome, and more than 50 per cent of respondents said that the impact of the sovereign debt crisis on the euro over the next quarter will be modest.

Despite this, concerns about advanced economy fiscal issues will be the key theme in 2011, according to more than three out of five respondents.

“The results of this survey point to a confidence that fiscal issues in the euro area can be resolved,” says PieroGhezzi, head of economics, emerging markets and FX research at Barclays Capital. “Nevertheless, institutional investors are very concerned about how government debt and fiscal policy is handled in advanced economies around the world.”

The asset classes of choice in 2011 are equities (40 per cent) and commodities (34 per cent). Fewer than ten per cent expect US Treasuries to outperform.

The US is set to experience a period of below-trend growth, according to 86 per cent of respondents. Less than six per cent of investors expect a double-dip recession in the US.

The overriding theme in emerging markets appears to be growth – 40 per cent of investors in emerging markets believe that the currencies and equity markets likely to outperform are those with strong growth stories regardless of carry and valuation.

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