Sell-off in global markets abates as Brexit opinion seen shifting

Reuters: Shares, oil and bond yields rose on Friday after a tumultuous week and as campaigning for Britain's EU membership referendum next week was suspended after the killing of a pro-"Remain" politician.

European bourses climbed more than 1% at the end of a third straight week of losses and benchmark 10-year German bond yields clawed back up to the zero mark as investors' risk averseness eased.

Wall Street was expected to start flat however, having snapped a 5-day losing streak on Thursday and with housing data and Canadian inflation figures due to be released. 

Campaigning for Britain's June 23 EU referendum, which overshadowed this week's U.S. and Japanese central bank meetings, was put on hold after British lawmaker, Jo Cox, was murdered on Thursday.

The recently volatile pound rose 0.5% to $1.4277 with analysts noting that Cox's death could generate sentiment in favour of remaining in the EU.

"There was this incredible melt down in risk sentiment (yesterday) where everything seemed to be aligning and then this terrible incident in England seemed to be the root of everything reversing," said Saxo Bank's head of FX strategy John Hardy.

"I think everyone is still in a state of shock as to what this means. Does it tilt the odds on a vote next week? It's hard to know but it certainly disrupted what the market was doing."

Euro zone banking stocks rebounded almost 4% having hit a four-year low - with all-time lows for banks including Deutsche Bank and Credit Suisse - on Brexit worries and sub-zero interest rates, which are eating into earnings.

Gold also advanced, rising 0.4% to $1,283 an ounce after wild swings overnight. It had surged to a near-two-year high of more than $1,315, only to slump 2.8% by the end of the session. It was on track for a third week of gains.

"Leading into the Brexit vote, we expect gold to remain around current levels between the $1,270-$1,300 range. But after then all bets are off as everything depends on the results of the referendum," ANZ commodity strategist Daniel Hynes said.

Overnight, Asia's main stock markets saw modest gains although that was little consolation after a difficult week that saw both weak Chinese data and the Bank of Japan hold off on more stimulus but talk loudly about currency intervention.

China's CSI 300 index made 0.5% and the Shanghai Composite added 0.4%. That helped them cut weekly losses to 1.7% and 1.5% respectively.

Crude oil prices rise for the first time in seven days

Crude oil prices rose on Friday for the first time in seven days, but trading remains volatile less than a week before Britain goes to the polls over its EU membership.

Brent crude futures LCOc1 were up $1.11 at $48.30 a barrel by 1142 GMT, having dropped 3.6% in the previous session.

U.S. West Texas Intermediate crude futures CLc1 rose 81 cents to $47.02 after falling by 3.8% in the previous session.

Both contracts are on track for a more than 4% decline for the week.

Analysts said that investors had closed some short positions after a week of volatile trading, which helped to bring about some correction in oil prices on Friday.

"I suspect markets will be very volatile overnight on Thursday and on Friday," Capital Economics Chief Economist and Head of Commodities research Julian Jessop told Reuters Global Oil Forum.

Jessop said he would expect a sharp sell-off in oil if Britain votes to leave the EU, possibly sending prices as low as $40 for Brent before a rally sets in.

He forecast Brent and WTI crude would be around $45 a barrel at the end of 2016 and around $60 at the end of 2017.