Fitch survey shows investors expect euro crisis to worsen

LONDON Mon May 13, 2013 4:00am EDT

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LONDON May 13 (Reuters) - More than half of investors expect the euro zone crisis to deteriorate again, a quarterly survey carried out by rating agency Fitch showed on Monday.

The survey, which polled managers representing an estimated 8.6 trillion euros of fixed-income assets, showed 29 percent felt the recent let up in the crisis was a short-lived period of calm. Another 30 percent said markets were "irrationally exuberant" and ignoring the bloc's weak economic outlook.

"There is a stark dichotomy between the continuing recession and rising unemployment across Europe, and the rally in financial markets," Fitch said.

"If the latter is not validated by economic stabilisation and progress towards banking union, the danger is that market volatility will return with a vengeance over the summer, as it did in 2012 and 2011." (Reporting by Marc Jones Editing by Jeremy Gaunt.)

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