good morning. global market alert. the german bund deal goes negative for the first time ever. >> the countdown to the brexit vote. momentum swinging toward the leave camp. and the latest polls, betting odds are narrowing and global investors are taking notice. a roundup coming up next. and don't forget the fed. janet yellen for the much promised meeting. it's tuesday, june 14th, 2016, "worldwide exchange" begins right now. good morning, welcome to "worldwide exchange." on cnbc. i'm sara eisen.

>> and i'm wilfred frost. a very good morning to you indeed. let's get right to the market action. u.s. equity futures pointing by a quarter of 1%. s&p by 7 points, nasdaq by 11.5. last week, u.s. equities were a little more resilient, but friday and monday they've taken part in the selling, albeit slightly less pronounced than equities around the world. the big headline this morning, the german ten-year bund yield in negative territory. it's back into negative territory, minus 0.05%. so, as you can see, a very steady move, over the last year. of course, most of that has been qe related. the moves over the last few days largely risk off sentiment in part down to brexit. let's have a look at the dollar as well. of course, interesting move yesterday. in fact, the dollar index traded down a little bit, about a

quarter of 1%. it didn't do that off the pound. the pound off another 1% today. it was moving in volatile fashion yesterday. it was down and strengthened with expectation coming out. and it highlights how close the pound is dancing to the tune of the latest brexit polls. but, a vote from kit juckes, in what he expects it to do, only a 5% to 10% move. >> the drama this morning is the in german bond market. subzero yields. we talked about it. just to put it in perspective why we're surprised and this is such a major headline is we're

seeing unprecedented demand. whether in the uk, japan, in switzerland, so much so that you can loan the german government money and not make anything. in fact, lose money with that yield actually go negative. and it speaks to the amount of bond buying that they've been doing. and speaks to the global demand. it makes it a lot easier for governments to borrow when they have negative yields like this but it also speaks to challenges that the central banks are having when they have zero or negative yields and they can't even stimulate growth. >> i think that's the main worry, yes, we're worried about global concern, the safety, the brexit. the cross over zero reminds us how much markets are supported for the last decade in europe and japan. whenever we worry about prospects of markets, remember this, markets in europe or japan

are still very much propped up by monetary policy. not by the fundamentals. >> and the question is, how far can they go in efforts of growth? we're already in negative territory. it actually makes the yield look good. i'll show you the global equity market picture. we are seeing losses across the continent. along with the safe haven rising like german bunds. like the japanese yen. 1.3% for the german dax. 1.4% for france. italy down as well. the banks have been in focus and they've been lower in the past few sessions. we'll show you asia overnight. the japanese went lower. the shanghai composite managed

to gain .03%. and hang seng 0.6% down. >> and the last week, we're looking at 7% for the stoxx euro 50. finally starting to make up to issues of brexit which they've been slow to do as the pound has been moving for quite some time with regards to brexit. the ten-year note, as sara says, big yield. 1.57%. a lot of yield compared to where it was a few weeks ago, 1.9. oil prices, the international energy agency declares it expects the oil market to be balanced in the second half of 2016. noting there has been the first global drop since 2015.

having had a strong week last week. oil prices have enjoyed a bit of a counsebounce. >> let's get you an update on the brexit vote. and the most recent polls and odds which are moving the markets. the latest ugov poll giving the leave campaign a 7-point leave over the remain camp. 11% undecided. 4% won't vote. yougov showed a 1% leave. this is a big change there. other polls putting leave ahead. two icm polls one online and one by phone. big shifts here. also notable, the betting odds on brexit are narrowing. the implied probability of a vote to staying in the eu, falling to 55% today, that is

down from 58% probability for in vote. it's still showing the in vote is ahead. the betting market which is the smart money looks at. is down. >> the last couple of weeks significant momentum building behind exit. but that remains ahead, which i think is the crucial thing to continue to watch. a big call as well by britain's biggest selling newspaper, big el selling daily newspaper, rupert murdoch's "the sun" as "beleave in britain. dwt "this is our last chance to remove ourselves from the undemocratic brussels machine and it's time to take it. ""it's symbolic. more because it shows what the paper in the uk, they don't want to back the use other change minds from here.

it's interesting when "the sun" comes out with the front page. >> i read it. i think it's a strongest immigration -- also the leave camp. they say stop worrying about a trade deal being lost with europe. we never had a trade deal with the united states and we've been dealing successfully with them for two centuries. we don't need a trade deal. for the first time i really went through the economical argues for leave. and i thought they presented a good argument. >> yeah, i think they brought up uncertain facts. the crucial thing with this is, this is coming out and they're showing which way they want to go. but "the sun" has been backing leave for quite some time. "the sun" does change its spots. people feel that conservatives,

voters on the conservative time have probably made their mind up by now. it's now to get the people on the left out. and gordon brown getting into the frame yesterday seeing if they can turn out enough remain voters at the moment. that's one of the reasons the polls have been moving. back here in the u.s. a trio of jobs reports, retail says and import prices both out. sales are expected to have risen after surging in april. prices seen prices emerging fafgter in may. then at 10:00 a.m., those retail sales numbers obviously will be key. also, a policy meeting expected at 2:00 p.m. eastern time tomorrow along with members of latest economic projections. goldman sachs chief economist on what fomc is expecting. >> if it hadn't been for the

employment report, then it looked like there's a chance that they might go this week. clearly, that's not happening. and now the question is really what will that signal about what happens after the june meeting, you know, july, september, what do we see in in that and so forth. >> fed chair janet yellen will hold a news conference at 2:30 eastern time tomorrow. new this morning, the u.s. saying that the china reforms are even. saying that china's ability to deal with financial shocks are eroding. this is following a visit he made to beijing. we're eagerly anticipating a report from the imf later this week on the uk where they dive into some of the risks around brexit. we expect that wednesday or thursday. >> we kind of know what they're going to say. >> economic argument, though. >> the economic argument, the interesting thing is foreigners

like laguard, it doesn't help. switching gears, the investigate continues into the orlando massacre. eamon javers join us. >> reporter: good morning, wilfred. last night, thousands gathered in central square in downtown orlando to mourn, pay their respects. particularly members of the gay community who said they came out here last night to rally, just to bear witness pofor what has happened here. the instincts is to hide. they said they wanted to be very, very visible. the mayor of orlando spoke passionately about his community. here's what he said. >> light shines in the darkness, and darkness can never extinguish it. we will get through this. our city's darkest hour, our

residents have shown they are that light. >> reporter: and we're also learning that president obama intends to come here to orlando on thursday. he's going to stand with the community and pay his respects as well. we'll get more details on that travel as the day goes on. as we said, in the past 24 hours or so, investigators are continuing to search for clues to this horrific tragedy that left 49 dead, plus more than 50 wounded here in orlando. so far, the indications are no outside guidance from overseas for this shooter. the indications are he was self-is radicalized. born here in the united states. inspired to do what he did from what he read on the internet but ultimately not connected to a terrorist organization in any formal way. that, however, didn't stop isis for taking credit for the tragedy that happened here in orlando. >> eamon, thank you for that update. when we come back, fears weighing on the globe market.

the german ten-year bund yield turning negative. derrick hallenny will join us next. you're watching cnbc, first in business worldwide. who owns stock in this company, that builds big things and provides benefits to this woman, with new cabinets. they all have insurance crafted personally for them. not just coverage, craftsmanship. not just insured. chubb insured. before the cmo thought to himself, "yeah, i can do that." and then thought to himself, "no, i shouldn't have done that." [ crash ] and doctors with real-time data at their fingertips asked, "how a man your age could do this to himself?" before any of this, cdw orchestrated a point of care solution using the lenovo x1 carbon yoga

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trade of the day. many believe yellen will dismiss the weak may jobs report and maintain a plan to hike interest rates for a second time at some point later this year. so if the fed chair maintains

which stocks will benefit, our data team crunched the numbers to see which dow served best between hikes. goldman sachs, apple and home depot all significantly this as investors gain more certainty because a cpo could help out. join cnbc.com to see. fears weighing on the global markets. joining us to discuss it derek halpenny, good to see you, derek. >> good morning, sara. now that we've seen the pound start to lose some steam, nothing severe but another a two-month low for the u.s. dollar, what kind of price is being priced in that britain votes to leave? >> well, clearly there has been a shift in the last couple of days. the poll of polls that we look at, the last for entry points

from yesterday and the day before, shows leave ahead for the first time since we've been tracking the polls last year or so. quite clearly, there's been a momentum shift. and the probability in terms of the risk priced in, you know, i would say, 35, perhaps creep in towards 40%. so, you know, certainly, there has been an increased probability being pricinged in over the last couple of days. >> so, derek, you think the sterling markets is really tracking the betting market. if the polls turn out with the leave vote is more likely, that could be a if we get that sharp vote? >> i think there are a number of issues at play. it's not just looking at the polls but interpreting them. the momentum is with leave. 51%/49% is the poll of poll figures that i have. but a lot of analysts do argue that, you know, for a sift from

status quo to something dramatically different, the leave campaign perhaps might need to be in the lead of about 4%, 5% percentage points to swing it on the day. so, we're not quite there yet. although momentum is with leave over the last couple of days, the markets are still probably looking at the most likely scenario of a vote to stay. obviously, it's beginning to shift. >> derek, do you have a full cast of the panel against the dollar if we get a vote to leave? >> yeah, you know, i'm envisioning this nervous talk of market action continuing until the 23rd, the day of the vote. perhaps we trade below 140 or 138 on the actual day. and then if there's a brexit vote, i would certainly anticipate 130 or high 120s as the level for the pound versus the dollar in the not too future aftermath of the vote to leave. >> there's a lot with currency

markets, derek. the japanese yen is strengthening. we're seeing gold at a one-month high. is all of this related to fears of brexit or is there something deeper going on when you look at a negative ten-year bund yield? >> well, i think that's a good question. i would personal pitch for it being a little bit more than brexit. obviously, brexit is full focus at the moment. you mentioned the imf warning in terms. corporate debt situation in china. and the need for imminent action on that. and we also had forecasts from the world bank last week which were pretty grim. i think the world economy is definitely there as an issue. i would also add in from your side of the pond which is of course the trump/clinton elections. i think that will become full focus the moment after the

referendum. >> do they get -- >> yeah, i do think it could. there was a corporate survey last week which indicated a spike in concerns over political risks amongst u.s. corporations. if that is the situation, i do think that in the period between now and the 8th of november, there's a very good chance that corporates in the u.s. are going to pull back on investment decisions on hiring. and we could start to see that in the data. and that, i think, definitely, could have an impact on the u.s. dollar. >> derek, do you think we'll see response to brexit? >> yes, i think pan will be hit most. second most would definitely be the euro. we're assuming the euro dollar would quickly trade down to 107-ish, on the back of a brexit. obvious implications for the uk. but i think more burning issues

for europe would be this kind of anti-establishment vote against the view of an undemocratic process that takes place in brussels. and that would have serious implications for the future outlook for the european union. >> derek, thanks so much for joining us. much appreciated. still to come on "worldwide exchange," this morning's top stories including the cleveland cavaliers avoiding elimination. good morning, we're going to watch a lot of heat as the big story. there's more widespread thunderstorms affecting a lot of folks including right here in the midwest. kansas city in the midst of severe and damaging weather, hail and isolated tornados are going to be a factor into illinois. scattered showers and tomorrsto popping up in the south. in the northeast, it's been phenomenal there the last couple of days.

temperatures do bump up a bit. but the humidity not there yet. meanwhile, the heat is going to remain a big story across the central plains and build into the southwest as we get into the week and weekend. that's your forecast. for the weather channel i'm jen carfagno, "worldwide exchange" continues after this.

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from washington with more. edward. >> good morning, wilfred. there were fireworks at the u.s. capitol yesterday. members of congress protested on the house floor right after a moment of silence for the victims in orlando. >> reporter: chaos in the house chamber. speaker paul ryan asked for a moment of silence that's when representative jim hines and a few democratic members walked out under protest. >> i could have passed legislation and yet i decided to observe yet another moment of silence. i figured that's enough. that's not leadership. i'm not doing it. ♪ >> reporter: as the nation mourns for the orlando shooting victims and vigils across the country including senator bernie sanders, lawmakers remain divided. hines and other democrats want bills to pass the house. >> we also have to make sure that it's not easy for somebody who decides they want to harm people in this country that they

obtain weapons. >> it's essential that we stop terrorists from getting the tools they need to carry out the attacks. >> reporter: the presumptive republican nominee for president countered saying we need to secure more for america adding that omar mateen may have been born here but his parks immigrated from afghanistan. >> when i'm elected i will suspend immigration from areas of the world where there's a proven history of terrorism against the united states. >> reporter: president obama announced on thursday, he will go to orlando. he plans to meet with the families of the victims. reporting live in washington, wilfred, sara. >> edward, thank you. now to sports the cleveland cavaliers avoiding elimination last night. the cavs pulling away from the golden state warriors thanks to a monster night by lebron james and kyrie irving.

draymond green was suspended. the cavs end up winning 112-97. the warriors look to win their second straight nba title. game six back in cleveland thursday night. >> i hope the cavs win. we want it to be 3-3 going into the all-important final. >> lebron versus steph. coming up the german bund yield turning negative it's a big deal. why you should sit up and take notice. >> not just a big deal for us. >> no, for everyone in the world. we'll be back with "worldwide exchange."

good morning. the countdown to a brexit vote, momentum swinging towards the leave. and the market reaction, straight ahead. global market alert. the german bund yield going negative for the first time. we'll tell you why that matters. plus, don't forget the fed. janet yellen and company meeting in washington for a much talked about two-day policy meeting. it's tuesday, june 14th, 2016. you're watching "worldwide exchange" on cnbc. >> good morning. welcome back to "worldwide exchange" on cnbc. i'm sara eisen. >> and i'm wilfred frost. who would have thought yen relegated to the third headline on the day of the june meeting? >> it's a three-day meeting. german bund yield, a lot going

on. >> u.s. future s pointing lower but more resilient than what we're seeing elsewhere in the world. about .30%. and the dow by 13. and the ten-year german bund yield goes negative for the first time, steve sedgwick is following the story. explain why. >> yeah, german investor, german savers are desperate for some form of income out there and they're not getting it from anywhere. the fund managers are promoting the fact that they can't get anything from their portfolios as well. it's going farther out. we had bill gross warning at the start of the week, about $10 trillion worth of government bonds out there in negative territory. that figure is old hat.

it's even bigger than that. look at this, two-year paper, .115%. german ten-year, first time ever, the stalwart of the european bond market, this is the big one, this is the daddy of the european bond market it's now gone negative. negative 0.27. if you want a return you have to go 30 years to germany to get over half a percent. this isn't about brexit. this is about financial depression. the desperate expert and will draghi to force people from these assets to these assets. and other risky ones. the problem with these ones is that people are selling down the bonds to buy the equities. because look at these equity markets. three-month lows on the equity markets as well. bill gross called it a super low that's about to explode. real concerns about what's

happened next in the markets. something's been halli ihappeni long time. do any of you remember 2011? i do. i was on the streets of dublin. the irish paper was 14%. and the irish ten-year paper is less than 1%. it's about 0.5% of 1%. do you know the irish rose money last week at 2.35%. what do you think the time scale on that one was? 100 years. quite extraordinary, guys. >> quite extraordinary, indeed. steve, less just get the folks on those equity market moves behind you. the main driver of that, do you think that's brexit fears? >> you know what the main driver is, wilf, no one can find anything to hang their hat on the other side of the trade. yes, they're concerned about brexit and the bonds market. but they're also concerned about china. and the growth in the united states. a whole host of issues.

earnings recession. look at the earnings. they can't find anything to get excited on the upside. it's not a two-way trade. it's very rare. i do think, i agree with you entirely, i think brexit is the latest catalyst, but it's no more than that it's a concern adding to the other concerns. you know the old adage a straw on the back of the camel that breaks the back? well, this is the straw on a bale of hay, that's what's going on here. it's not saying that they can't reverse but at the moment, it's a bleak outlook. >> steve, great to see you. of course, let's have a look now at asian equities there in the red, not quite as pronounced as european markets have been. but 1% down for the nikkei today. hong kong down 0.6%.

risk aversion going into safe havens, the currency market has been interesting. a tale of different currencies as we speak. the british pound is under pressure as momentum continues to builds for the leave camp which has been clearly weighing on the u.s. camp. the flynn side of the dollar is stronger today. that's been a headache for u.s. corporations. we're nowhere near the strongest levels that we saw earlier in the year or last year. something to watch. as for the ten-year need, lower yield, the name of the game. we're not in negative territory like germany, but we are below 6%. 1.57, yields continue to collapse around the globe. as your oil, understand pressure as well. wti below 49. 48.23. brent below 50, and big headline overnight, international energy agency declaring it expects the

oil market to be balanced towards the end of 2016. yea, that was revising its global forecast upwards and noting that last month there had been the first significant drop in global supply since 2013. a bit of a change there perhaps that is was already factored into the markets. quickly, let's show you gold because it's trading on a one-month high on the result of fears of global brexit. stocks to watch. china's largest search engine baidu cutting its revenue by 10%. the firm with medical advertising as regulators have heightened scrutiny of medical. nxp is selling its products unit to two chinese firms for $2.7 billion. zimmer biomet is launching the secondary offering. it consists of more than 11 million shares. a brazilian judge has

dismissed a nearly $6 million against vale and bhp. novo nordisk, with wider use of that treatment, it doesn't look like it's helping the stock much today. al me baba expects to almost double transaction volumes by year 2020. this comes as executive chairman jack ma promised to hike the crackdown on fake goods. gawker media is asking a bankruptcy court for permission to borrow up to $2 million for the private equity firm. it says the company would help to get to its serve process. after failing to get a post pointment in paying $140 million in damages to hulk hogan. davis has a deal to buy gawker for $19 million setting the floor for an opening bid on an

auction. meantime multiple reports that fantasy sports firms fanduals and draft kings are in talks to america. landon joins us. >> that's right, the two rivals could unite potential becoming 40% of the sports industry. the combination would be the cost for the two firms having to defend themselves. fanduel and draftkings have come under scrutiny for states wanting the firms to be regulated. restrishcted in at least ten states. operators say daily fant stays game of skill and not equivalent to gambling. they could reduce advertising to battle for market share against each other. fanduel and draft kings keep topping $1 billion.

>> going to have to spend a lot on their legal bills as they try to challenge all of these different court decisions. now, to the pop trending story. days after the shooting in orlando. vigils are being held around the world. we've got pictures for you. the lgbt community rallying together. celebrities speaking out against the attack on social media. did you see activist harry potter author jk rowling giving special attention to one employee at universal saying luis vielma worked on the harry potter ride at universal. he was woo years old i can't stop crying. still to come, today's must reads. the returns to the markets. the big moves and complete roundup of those moves when we come back. hold on to your tiara kind of day.

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offensive. saying tori voters are likely to have a vote of 19%. david cameron, they need voters to get out and get organized. thus far with the leader it's been a mixed message. that's one of the reasons the polls are starting to build momentum for leave. and coming out to mobilize to get voters out. if they don't, david cameron, despite being from a different party, won't win his vote. that's one of the reasons. >> can he stay on as prime minister, if they vote to leave? >> he maintains he will. everyone expects if they get a vote to leave, even if they get a close vote to remain he would be under huge pressure to resign. >> boris johnson? >> well, boris johnson would be the leader.

the focus at the moment is on david cameron. the damage could be just as bad for mr. cameron as mr. corbin. there could be a lot of shuffling around. >> good of you to get into british politics for us. >> you say that, at times, we don't want to talk too much about it. >> it's important right now. it's clearly the debate of the moment. i'm looking at u.s. politics. my "must read" of the day is from "the washington post." it's "the washington post's" own marty behringer response to trump taking press credentials away. to donald trump's decision to revoke "washington post's" press credentials is nothing less than a repudiation of the role of a

free and independent press." they say they're going to continue to cover donald trump. there are obviously two sides to the story because the media has been, you could argue, hard on donald trump. he's been an out lier of a candidate. but on the other hand, it's an interesting subplot for candidate, a presumptive nominee for president banning news out lets. and. were is one major credible one. it's not the first he's also banned huffington post and buzzfeed. >> i'd likely to see happy birthday wishes for donald trump in "the washington post." >> he turned 70. >> he turned 70 today. when we come back, today's fed meeting overshadowed by big stories. we put it all in perspective next. first, as we head to break, we go back in history. it's flag day today which marks

the adoption of the american flag by continental congress. one of the largest flag manufacturers says sales are up 50% this year thanks in part to the ygeneral election and rise n patriotism. we're back in a couple minutes. what are you doing?

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cdw orchestrated a mobility solution, using the hp elite x2 1012 with intel core m vpro processors. mobility by hp. orchestration by cdw. welcome back to "worldwide exchange." a quick look at u.s. futures which are pointing only by a third of 1%. the dow called lower by 34 points. s&p by 7. nasdaq by 13. over the last week, we've seen big risk-off moves and bearish asset classes around the world. we're approaching the top of the hour. that means the team is getting ready for "squawk box." joe kernin joins us with a look at what's coming up. joe, what do you got for us today?

>> i believe that while i was in the makeup chair, you may have been talking about brexit. wilfred. at least one eyebrow is raised, is it not? you've got my betting numbers today? because those still -- people that point to stay say those are still in favor. i keep seeing the polls. >> joe, they are, it's not just an eyebrow raise. it's an eyebrow very firmly raised it's firmly behind exit. remain is most likely but only 59%, the latest betting. >> did you say 59 or 69? >> 59. so it's getting very, very close. extraordinary momentum behind exit that remains still just ahead. and the pound is certainly responding to it. and european equities you'd have to say responding as well over the last trading session.

they're down 6% over the last week. >> i saw a video, i won't go into the source, but it was a gentleman speaking about -- it was supposed to be taking place a year after the vote, when it's been a year of being back out of the eu. who -- have you seen this? who is the gentleman speaking there? >> i think you're referring to a. member of european parliament, daniel hernan. a conservative member. it's hard to say without seeing the video, it suggests that it the european union could celebrate which i think is overdoing it. >> okay. i felt like a subject. a royal subject. when the queen showed up, you know, everybody is sat buckingham palace, i want to like move over there. i don't know, it was very patriotic, jets flying over and all that stuff. if people see enough of that, i'm not sure they do stay, wilfred.

>> i'm not sure about that video but there was an interesting development that we discussed earlier about "the sun" the most read daily newspaper. >> beleave. beleave. i thought it was spelled that way normally, but apparently it isn't. that was a play on the word "believe." >> it was indeed. we're seeing the pound down another quarter percent. >> normally, the tail doesn't wag the dog. but in this case -- >> it it it definitely is u.s. equities have been more resilient. >> whilst, whilst -- >> whilst -- >> it's not rubbish to use the word "whilst" -- >> guys i correctly used while. >> you did. >> i'm going back to whilst. >> i have a clinic for you how

to become an american from like the midwest. bear with us, wilfred. you're making great strides. >> joe, we're going to have to leave it there. thank you very much. "squawk box" in eight minutes time. >> not rubbish, garbage. the fed begins a two-day fomc meeting this morning and joining us to talk about what to do next is michael gamen from barclays. good morning. >> good morning. >> what should we expect from the federal reserve in terms of communication, how does she walk the line in terms of saying they're in rising interest rate mode but also being cautious? >> well, i think the speech last week gave you a bit of a preview. the first half of that speech will be about confidence in the outlook. confidence in a longer term of view in recovery. that sets the tone for the bias

for better rates. in the near term, activity has rebounded and softened as you've been discovering we had the uk referendum and markets are acting skittish around that. >> do they mention that? you expect that to be part of the fed's official communication from this meeting? >> not in the statement. i don't think it will show up in the statement. it may very well show up in the written portion of her conference. it will likely show up in the press conference itself. certainly in the minutes following the meeting. i don't think it it will show up directly in the statement. >> even note fed may have got be more dovish in the last week or so, do you still think it's supported? >> in the near term, if vote to leave at least gains momentum as you were just discussing and it's putting pressure on the pound and perhaps the euro. the dollar may get a safe bid.

and there's a story here on how fast the fed can raise rates. but in the near term, yes, if there's a flight to quality to leave, it could be benefited in the short term. it's unclear how long that will last. >> when you wake up this morning, when you start getting your calls from clients asking you what do we make of a german ten-year bund deal that's now gone negative, what are you telling them? what is your advice on that? >> well, my job is to try to explain why it's happening. at least we know generally the growth story in europe, it's been better recently. but we don't necessarily expect that to continue. and i'd say the recent news is that payroll growth has been slipping in the u.s. and that's prestaged every recession since 1960. bound markets don't see a lot of upside. so unless fiscal policy in the u.s. or europe comes on board, it's very difficult to tell an upside story to growth.

growth still has a lot of downside risk. and therefore, the long end of the yield curves are responding. it's difficult to find yield in these markets. >> michael, is it a reminder as we cross into negative territory on the german ten-year yield today how false it has been over the last decades or they've generally been driven by monetary policy? >> well, they certainly have. and obviously, the monetary policy works through financial markets and equities are one of those markets. ultimately, policimakers would say we'd love to back away and hand off that evaluation to a fundamental economy that can support earnings growth that hasn't happened or at least much more shaky than policymakers would want. but certainly, policymakers have been supported by the feds testing how quickly and to what degree they can pull back. but you're absolutely right on that assessment. >> so, michael, what do we

expect out of retail sales this morning. it's been a bit of a puzzling picture at last month's retail sales pretty good each though the results of department stores were lousy. is this just the result of amazon and growth online? what do you expect? >> i think you're right. the big department stores are struggling a bit versus, say, online sales. but the competition is shifting. overall, trends in retail sales are consistent with a fairly healthy u.s. consumer. the issue this month, of course, we had such a solid report last month, it's difficult to get further momentum. we're looking for a 0.4 rise in the headline for auto sales. at the core level we're looking for a modest 0.2 rise. a bit of a giveback. it remains in a fairly healthy spot in the u.s. and we're keying in on labor markets. if you want it to continue,

you're going to need solid labor growth. >> michael gapen. thank you. that's it.

good morning. stocks in europe following. the yield on the german ten-year moving in negative territory for the first time ever. momentum apparently seems to be swinging towards the leave camp. and the latest polls betting aulds are narrowing. but still at 59%, stay. and global investors are taking notice. plus, the fed's in focus, but that's -- we no longer think it's a live meeting but janet

yellen and company kicking off a two-day -- what do you call it, a meeting. a pow-wow. it's tuesday, june 14th, 2016, and "squawk box" begins right now. ♪ >> announcer: live from new york, where business never sleeps, this is "squawk box." good morning, everyone. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernin and andrew ross sorkin. take a look at u.s. equity futures. yesterday, the market closed at three week lows. the s&p 500 the nasdaq had the lowest losing streak in four months. however not as bad as what we've seen in the overseas market. the dow futures down by 23 points. s&p down by 5.5. nasdaq down by almost 10. in europe,