Business News

CCTV Script 17/06/16

– This is the script of CNBC's news report for China's CCTV on June 17, Friday.

Welcome to CNBC Business Daily, I'm Qian Chen.

Developed market bond yields took another leg lower on Thursday as the market turned its focus back to concerns the U.K. may vote to exit the European Union in its looming referendum.

Markets globally have become more volatility in recent days as opinion polls in the U.K. have begun to indicate the "leave" camp will prevail in the June 23 referendum on Britain's EU membership.

UK's equity and currency markets are taking a punch, with FTSE 100 index falling nearly 5% for the past 2 weeks, declining 7.7% YTD.

What that means is ... the FTSE 100 lost £100bn in four days before June 15, as Brexit paralyses markets and pound crumbles.

Sterling against the greenback has been weakening, for the past 2 weeks, falling by 1.1% and 3.24% YTD.

Meanwhile, Sterling against Japanese yen has weakened by 4%. Where have the money been moving to? The answer is -- buying protection, treasury bonds, safe-heaven currencies and gold.

The yield on the 10-year Japan government bond (JGB) was trading at negative 0.205 percent.

The yield on the German 10-year bund re-entered negative territory at negative 0.024 percent, after having turned positive on Wednesday, although that was off a record low of around negative 0.035 percent touched earlier Thursday.

The U.K.'s 10-year gilt touched a record low yield of 1.075 percent Thursday,

while the U.S. 10-year Treasury yield touched four-month lows of around 1.541 percent.

You can see this in the rather strange action of the CBOE Volatility Index, which indicates a strong demand for protection.

The VIX moved five points - from roughly 14 to 21 - from June 7th to 13th, 5 trading days.

Normally, when you get a five-point move in the VIX in a short period, you would expect the S&P 500 to move roughly 3 percent to 4 percent - but the S&P only declined about 1.5 percent.

That might indicate that there wasn't as much selling of stocks as you would expect, but there was suddenly a lot of demand for protection.

CNBC's Qian Chen, reporting from Singapore.

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