Ninety-six percent of institutional investors overwhelmingly believe Europe will be able to avoid a “full-fledged crisis,” according to the inaugural Barclays Capital Global Macro Survey.

Barclays surveyed 2,007 institutional investors, including money managers, hedge funds and proprietary and corporate trading desks.

Only 4% believe a euro-area crisis and break-up of the euro currency is a likely outcome, and more than 50% said the impact of the sovereign debt crisis on the euro over the next quarter will be modest.

Nonetheless, more than three out of five will be paying close attention to fiscal issues in Europe and other developed nations in 2011.

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

Forty percent said their asset class of choice in 2011 is equities, and 34% said commodities. Less than 10% expect U.S. Treasuries to outperform.

While less than 6% expect a double-dip recession in the U.S., 86% expect the U.S. to experience below-trend growth for the foreseeable future.

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