* Risk appetite falls in afternoon trading
* Britain's FTSE closes off highs after new referendum poll
* "Leave" leads before UK referendum in latest polls
* Yellen hints at no rate hike in July
(Updates market activity)
By Edward Krudy
NEW YORK, June 22 (Reuters) - Global markets turned cautious
on Wednesday, a day before the United Kingdom votes on whether
to stay in the EU, with Wall Street stocks trading sideways,
sterling giving up gains and government bonds edging higher.
Oil shed more than $1 to fall back below $50 per barrel and
the yen was down against the dollar, with the latest polls
showing a slight tilt towards leaving the European Union when
Britons go to the polls on Thursday.
The "Leave" campaign holds a 1-2 point lead over the "In"
camp ahead of Thursday's membership referendum, according to
surveys published by polling firms Opinium and TNS, reversing a
tilt earlier this week towards "Remain".
"I think the result of the Brexit vote is 50/50, and it will
probably be very tight," said Olivier de Berranger, fund manager
at French firm La Financiere de L'Echiquier, which manages
around $9 billion in assets.
Sterling rose around 0.1 percent against the dollar, below
$1.47 GBP= and edging away from Tuesday's 5-1/2 month high of
$1.4781. The pound has risen 5 percent since dropping to a
three-month low of $1.4010 last Thursday.
Britain's main share index hit a two-week high on the eve of
Thursday's vote on EU membership before surrendering half the
day's gains in the last minutes of trading.
The Dow Jones industrial average .DJI fell 0.24 percent,
giving up morning gains. The MSCI's all-country
world stock index .MIWD00000PUS edged up 0.14 percent but has
still gained 2.2 percent so far this week.
Putting a floor under markets, betting patterns with
bookmakers have shown a re-opening of the gap in favor of
"Remain" after the murder last week of a pro-EU lawmaker
appeared to derail the "Leave" campaign.
Europe's stock markets also pared gains into the close.
Europe's FTSEuroFirst index of 300 leading shares was up 0.5
percent .FTEU3 , Germany's DAX was up 0.6 percent .GDAXI ,
France's CAC 40 .CAC40 up 0.3 percent and Britain's FTSE 100
up 0.6 percent .FTSE .
The yen slipped 0.3 percent against the dollar JPY= to
104.41 yen, and the euro rose 0.5 percent to $1.1301 EUR= .
For the latest Reuters news on the referendum including full
multimedia coverage, click
Fed chief Janet Yellen said on Tuesday the risk of Brexit
was something that needed watching "very carefully", but she
added that the central bank's ability to raise interest rates
this year may hinge on a rebound in hiring
Yellen concluded her testimony in front of the U.S. House
Financial Services Committee on Wednesday, with little further
indication about the central bank's thinking on the U.S. economy
and the timing of interest rate hikes.
Benchmark 10-year U.S. bond edged lower, yielding 1.68
percent US10YT=RR . Germany's 10-year yield edged up a basis
point to 0.06 percent EU10YT=RR .
Gold cut some of its earlier losses after the polls but
edged lower into the afternoon. Spot gold XAU= fell 0.2
percent to a near-two-week low of $1,265.60 an ounce.
Brent crude futures LCOc1 fell 2.7 percent to $49.27 per
barrel. The new benchmark August contract for U.S. crude futures
CLc1 fell 2.7 percent to $48.49.
Reuters' new Live Markets blog on European and UK stock markets
reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
Asset performance in 2016 http://reut.rs/1WAiOSC
Currencies in 2016 http://link.reuters.com/tak27s
Britain EU referendum polls http://tmsnrt.rs/1Ke31HF
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