Fears Britain is on the verge of voting to leave the European Union next week spread through global financial markets, sending Asian and European shares sharply lower and the pound to an 8-week low. Ivor Bennett reports
A win for their team in the European Football Championship meant traders in Germany were ready to celebrate But the feel-good factor didn't last long. A very a different kind of European tussle is spoiling the party. (SOUNDBITE) (German) BAADER BANK'S HEAD OF CAPITAL MARKETS ANALYSIS, ROBERT HALVER, SAYING: "You can actually touch the feeling of uncertainty here at Frankfurt stock exchange. The question whether the British will leave us or not is the all-decisive topic here. Everything else comes second." And not just here. Across Europe shares were down around 1 percent on fears of a Brexit. A poll on Friday giving the 'leave' vote a 10 percent lead. (SOUNDBITE) (German) BAADER BANK'S HEAD OF CAPITAL MARKETS ANALYSIS, ROBERT HALVER, SAYING: "Should the British stay with us we'll see a huge boom the following day here at Frankfurt stock exchange. Should they leave it would be terrible and it could end in euro-sclerosis, the disintegration of the EU." In Asia it was even worse. Stocks there posting their biggest falls in 4 months. But Brexit isn't the full story. China is once again providing grim reading after a fall in investment growth So much so that hopes of a US rate rise have been replaced by anything but. (SOUNDBITE) (German) BAADER BANK'S HEAD OF CAPITAL MARKETS ANALYSIS, ROBERT HALVER, SAYING: "The Fed will not increase interest rates because that would mean adding fuel to the fire. They should increase rates in July but please not this week. That would be crazy." In Japan, though, the expectation is the opposite. While sterling falls on the jitters, the yen continues to rise - up 14 percent against the dollar this year.