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Euro break-up index rises as investors fret about Italy: Sentix

Published 05/29/2018, 04:24 AM
Updated 05/29/2018, 04:30 AM
© Reuters.  Euro break-up index rises as investors fret about Italy: Sentix

BERLIN (Reuters) - The number of investors expecting the euro zone to lose at least one member state in coming months has increased due to the political crisis in Italy, a survey showed on Tuesday.

The Frankfurt-based Sentix research group said its monthly "euro break-up" index, based on a survey of around 1,000 institutional and retail investors, more than doubled to 13 percent from 6.3 percent in April.

"The turmoil over the Italian government formation, in which the euro-critical parties League and 5-Star want to form an alliance, has alarmed the bond markets," Sentix researcher Manfred Huebner said.

A sub-index on Italy showed that 11.3 percent of investors expected the third-biggest euro zone economy to leave the single currency bloc, up from 3.6 percent in the previous month.

The overall headline figure was far below the survey's record levels of more than 70 percent reached during the euro zone debt crisis in 2012.

Sentix said it conducted the survey from May 24-26.

Italy's anti-establishment forces abandoned their efforts to form a ruling coalition on Sunday after a standoff with President Sergio Mattarella, who vetoed their choice of a eurosceptic as economy minister.

Mattarella set the country on a path to fresh elections on Monday, appointing a former International Monetary Fund official as interim prime minister with the task of planning for snap polls and passing the next budget.

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