Good morning and welcome to Worldwide Exchange on cnbc. Happy friday im sara eisen. Are you saying happy friday to me or to everyone else. So you and the world. You tilted your head to me a little bit. I felt that very nice. Indeed im wifrt frost lets have a look at the market action. Futures seeing little action. Remember yesterday we did break a five day losing streak. Markets ended higher. The dow ended up almost a hundred points. Futures down 5, s p down 1. Nasdaq down 1 as well. Some of the pressure points are easing right now but quick a look at the 10 year treasury note yield went as low as 1. 52 yesterday. Back above 1. 60. High yields above 1. 60 this morning. First time weve seen german debt and japanese debt overnight sold in several days. Roller coaster ride yesterday. The dow was down 170 at one point by the close. We were in positive territory. A big turnaround we are going to dive into now. Global markets do appear to be assessing the risk of a brexit. Strong comeback yesterday. Making a bounce stronger bounceback today as you can see up to 1. 429 having hit a two month low yesterday of 1. 4013. Both uk Referendum Campaigns though have been suspended today after the killing of british politician jo cox who was an advocate of britain remaining in the eu. Early reports out, ive spoken to experts who say that is highly unlikely. Were expecting campaigns just to be suspended the rest of today. Well have more on the lead up to next weeks historic referendum in just a moment. Just quick though to dwell on that dreadful story from yesterday, of course. Markets did rally in and around that time. We still have no idea of the motives but either way the fact that she did advocate the remain camp, some traders obviously feeling you might see some sympathetic move in the polls. And other thing. The betting market odds themselves, less pronounced. Usually those two track very closely. Highlighting perhaps weve seen a little bit overreaction in terms of sentiment you might expect towards remain. On that note this is becoming a very crowded trade betting against the pound. Last week we found out there is a 6 billion short against the pound. The most negative position weve seen since 2013. Lets show you the early action in european equities right now. Much calmer on a friday morning. More than 1 gain for the german dax. These stocks very hammered a lot harder than the u. S. Stock market on brexit fears. The banks are leading. The banks have really been the eye of the storm when it comes to some of those concerns about brexit. As you can see there is the european banks. Barclays especially. It has been singled out as one of the the banks with the most to leave from a brexit vote because of the heavy exposure to london and investment banking. And Deutsche Bank of course which is not listed in london and could be one of the beneficiaries of tough fight backs if britain does leave but the fact that backs are leading the charge in european equities today does suggest the rally is brexit related because those stocks are the ones that have been hurt most on days of leave sentiment. Lets have a quick look at the german 10 year bund yield because it is back in positive territory, albeit by well not even 3 basis points. Bang on flat again. At least the chart is not red or the writing of the yield is not red. It is just in positive territory. 0. 002 . Time to celebrate. Ending a three day rally and even japanese bunds are rallying. One basis point return every year for 10 years. And in switzerland you get negative all the way out 33 years i think. And asian stocks enjoyed a little bit of a rally. Japan up a nice 1 as weve seen a little less of a reaction in the yen. The yen in fact is stronger today but hardly. 0. 1 . Hong kong up a little. Shanghai as well. Announcer the Broader Market picture. Oil has been under pressure. And interesting stocks managed to rally even though oil stayed lower yesterday. The Energy Sector was the only one closing in the red. Bounce back today. 1 for wti crude. 46. 69 right now. Brent is over 47, 47. 90. Even nat gas getting a pop. On the flip side lets show you do dollar. Wilfred mentioned the pound. Stronger a better sign. Yen, weaker. Also a better sign in terms of sentiment, helping the jpds stock market overnight. And the euro stronger as well. Lot of folks are watching the euro into the brexit vote because the question is what does it mean for europe . Extraordinarily big turnaround in the pound though over the last 24 hours. Lows yesterday were close to 1. 40. The highs were close to right now are 1. 43. So a very significant move the sterling in the last 24 hours from trough to peak. The betting odds towards remain have extended a little by of all the moves wean receive, this has been a much more exaggerated one in the pound weekend. So well every day next week as well. Quick gold because golds been a big mover. Reaching highest level in almost two years yesterday backing off as the stock market turned around. And continuing pressure on gold this morning. After all the excitement from the fed and other Central Bank Meetings the trading week wraps up on a quieter note. There is just one report out on the calendar. May houdsing starts. New construction expected to have slipped last month after surging in april. Building permits are to rise, expected to rise but at a slower pace than in april. I dont think many people are going to be too focused on that compared to brexit. Compared to brexit. But the Housing Market is showing signs of life in the u. S. Yesterday talking about how home Builder Sentiment is looking up. And it is a good sign. Important part of the u. S. Economy. I knew you would bring it back to make it relevant. I will not let you discount housing starts. Chancellor George Osbourne and canceling speeches overnight to pay tribute to jo cox. Officials used an annual dinner in london to pay tribute. This country faces a huge question in a weeks time, one that will determine its future for decades to come. The referendum is a great exercise in democracy. But the campaign has been suspended on both sides out of respect for jo and her family and out of respect for that democracy that she served. Joining us now to discuss the turn of events over the last 24 hours but more broadly what we expect to happen in the upcoming referendum on the eu in the uk. Peter spiegel, good morning to you. Thank you for joining us. Lets quick cover off the terrible news of yesterday in the uk. We did see some sentiment swings towards remain whether looking at steriling or betting markets. What do you think has sparked that exactly because we dont really know the motive of this event yesterday. We dont know the motive. Can. There was rumors postponing the entire referendum which is not true. And weve seen this morning some of the gains have backed off. There have been precedents in sweden, germany, other places where they have had political assassinations that have happened before election days. Weve seen in both countries it actually had very little impact on the votite. I think at this point it is speculation in the market. Volatility, huge volatility. So any news causes great swings. So i dont think anyone can predict the impact this is going to have. And peter, break us down the latest expectations. Six days to go, of course. The ft covers all the polls and brings them together. What are your latest expectations of the most likely outcome of this vote . Certainly happening just before this event was the momentum shifted. We had seen for months since polling started that remain went from a healthy lead to narrow and now literally in the last few days almost every poll. And it brings together the trend linicious not just individual pops but the whole trend. Almost every poll had been for leave and the momentum was clearly pushing in that direction. And talking to government officials, particularly on the remain side panic had begun to set in. And the George Osbourne had to cancel a speech last night. All indications trying to double down on this project. That is their economic line. So panic had set in on the remain side. Momentum was building for leave and a lot of people really thinking that the deed was done. That this was going in that direction. Again we dont know what this 24 hour, 48 hour pause is going to do with the ends the momentum in any direction. Changes sentiment. I got to say right now it is just as unpredictable those of us from the outside as on the inside. Were getting the same reactions from inside the campaigns t leaders, as we are looking from the outside. Wii see is same polls. Talking to the same people. They are no wiser than we are. So thats why you see so much volatility right now. What are you going to be watching . Ill be watching the pound and the betting odds. What are your indicators in the market . Which polls are important . Give us a the play by play of what we need to be monitoring up until thursday . It is not the individual polls that hit every day. Because they have swung considerably. It is again this trend line. And i think as you see a group of polls moving in the same direction that is what were watching very closely. And that is actually both what the markets are watching. As you see the build up of certainty in the polling data you have seen the markets fall. Sterling in particular and the betting odds. And the bund t u. S. Treasuries. This flight to the economic 10 year benchmarks. As the markets get more and more nervous they are pushing a lot of these Interest Rates below radioze zero. I think those polls are the first thing everyone is going to be looking at. And again talking to people in the city that is what they are watching. Quick i want to ask about mark carney and the bank of england who is getting heat for weighing into the debate. Appropriately talking about the economic impact. Any sense of what the contingency plans are at the bank of skpengd what is kboings on behind the scenes . There are contingency plans for this. They have been going on for weeks. As before the Scottish Referendum. Things like pushing liquidity into the system, worried that things would freeze up on a leave vote. All of those things they were preparing to do for the Scottish Referendum are basically replicated again this time around. And remember we got the same kind of criticism to the bank of england ahead of the scott, referendum as well. That the independent central bank is improperly moving into the political arena. And the question we are asked and writing about quite a bit is institutionally. Even if the the group of people who watch these things think that carney is behaving in a proper way, institutionally, senior politicians, former Party Leaders are coming out so publicly and kris criticizing the bank what does that do to the reputation . Does that do longterm or medium term damage to carney and the bank itself . And i think there is a lot of concern about that. Most people dont think hes doing any improper but reputation does it harm him in the system . And of course his chance to give his final views in his speech last night suspended a as all campaigns ahead been. Thank you for joining us this. Still to come. Stocks rallies around the world as Oil Prices Rebound and brexit fearsise. Matthew beasley is going to weigh in on that and much more next. What are you doing . Getting faster. Huh . 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While european equities have declined, the u. S. Equities have been more resilient. The dow down just over 1 in that time period. What about companies with high uk kprexposure . However, most of this top 10, their sales are predominantly within the uk. Not really effected by bere negotiations of trade deals. What about on a sector basis . Banks are likely the worst hit. Uk has a trade deficit with the rest of europe overall making retaliation less likely. Within the financial serves has a big surplus making error response in future trade negotiations. Of the top five banks Goldman Sachs is the highest exposure. Bank of america is lowest at 7 and average 14 . The biggest impact has already happened, delayed rate hikes and lower yields. And i wonder if were going to have to be putting this list together for exposure to europe as the whole. The uk is one thing. But when you are talking about europe you are talking about the biggest economy in the world and euro zone and well see how europe reacts. Exactly right. Suspending following the british politicians death. Jo cox an advocate of the remain camp in the eu. And mark carney paying tribute to her in a speech last night. The best tribute that this room, this city and this country can give to the memory of jo cox is to renew our shared commitme commitment, whatever our differences, to promote the common good in the United Kingdom and the world. Here to discuss the uncertainty surrounding next weeks referendum, matthew beesley. Good morning. Thanks for ro joining us. Morning. So are you in the camp that is loading up safe haven assets like german bunds for the bridge of getting zero in return . Or are you looking at this brexit vote as the buying opportunity for risk assets . Well i think right now as we sit it is just too close to call. And markets have been id argue wonderfully official lly efficig us to where we are today. Uk voting to leave. 50 chance of stay vote. And if i look at equities and sterling. When i think about ppp relationship, purchasing parity. A underlying true value of when you take into account Interest Rates and inflation i think markets having priced in about 40 or so of what we consider to be a likely downdraft in the event of the uk voting to leave. You think if we look at equities rather than currency the relief rally on a p remain vote would be similar in size of the fall wed see on an exit vote . Relief rally i think would be slightly higher but depends on the nature of the remain vote. Potentially three outcomes. Chance of resounding remain, a slim remain and the decision to leave. Opinion polls would suggest resounding to remain is unlikely. Really looking at the slim vote to remain or decision to leave. And in a slim vote to remain there is a risk. It throws up a lot of other questions about the validity of the vote to the extent this question gets revisit or meant for the underlying economy in terms of momentum and ultimately with trading relationships with the eu. Doesnt mean we see corporates treat uk based investments a touch more suspiciously than they have in the past, nervous of this question getting revisited. So i think if we do get a remain it is likely to be a very narrow remain and there could be still questions overhanging the economy and the market. And hence that lack of asymmetry in the risk reward. You clearly looked a lot at symmetry and as priced in. Were doing very little right now. This is very much out of the market purview. Markets have been very complacent about the chances of this referendum getting close. What unnerves us is just how large the amount of undecided are. 10 to 15 that are yet to make up their mind. And these are not apathetic voters. Those are people that yet to make up their mind and will cost a ballot. A risk that events between now and thursday has the ability to influence peoples Decision Making process. And as such i still think despite the betting markets and polling data there is still every chance this vote goes both ways. On the banks they have been hit the worst. Is london as a Financial Center under threat . I think there is certainly going to be challenges. Lots of corporate ceos. About the need to reconsider employee head count in the uk in the event of the leave vote. Certainly there will be those that weigh up etc. Etc. Post a decision to leave the eu by the uk. Matthew beesley, of Henderson Global investors. Rights still to come. Scores and more. Lebron james leads the cavs to victory last night forcing a Decisive Game 7 coming up. Steph curry and the warriors on losing side last night. You get use to pet odors in your car. 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Well bring you the Global Market reaction as stocks are rallying around the world. Happening now Christine Lagarde is giving a speech on the future of europe. Highlights coming up. And game 7, lebron james and the Cleveland Cavs make an historic comeback. It is friday, june 17, 2016 you are watching Worldwide Exchange on cnbc. I dont care i lov