Sterling, bond yields gain as Brexit views shift

Fri Jun 17, 2016 5:07pm EDT
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By Caroline Valetkevitch

NEW YORK (Reuters) - Sterling and bond yields rose on Friday as traders tried to assess whether the killing of a pro-European Union British lawmaker may change the balance of opinions in Britain's upcoming referendum on EU membership.

U.S. stocks ended the day with losses, though MSCI's all-country world stock index .MIWD00000PUS was up 0.5 percent.

Campaigning for the June 23 referendum, which somewhat overshadowed this week's U.S. and Japanese central bank meetings, was put on hold after British Member of Parliament Jo Cox was shot dead on Thursday.

Concerns that a vote by Britain to leave the 28-country bloc would cause turmoil in the global economy and European politics rattled markets and caused the pound to tumble earlier this week.

"This is people adjusting positions because they don't know what's going to happen," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York. "People are unwinding the 'risk off' trades for the most part."

The pound GBP= was last up 1.06 percent against the dollar at $1.4350, after reaching a one-week high of $1.4387 on Friday. On Thursday, it hit a low of $1.4010.

U.S. benchmark Treasury yields rose for the first time in nearly two weeks as investor fears of a British exit from the EU eased somewhat.

The benchmark 10-year Treasury notes US10YT=RR fell 16/32 in price to yield 1.618 percent. It was the first increase in 10-year yields since June 6.   Continued...

Traders observe a moment of silence before the opening bell to honor the victims of the shooting at the Pulse night club in Orlando, Florida, on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 13, 2016.  REUTERS/Brendan McDermid