Futures lower as investors absorb Brexit shock

[June 27, 2016]  By Yashaswini Swamynathan

(Reuters) - U.S. stock index futures were lower on Monday as investors assessed the implications of Britons voting to leave the European Union, a decision that sparked a global selloff on Friday.

* The so-called "Brexit" vote threw markets off-balance as investors worried over the consequences and fled to safe-haven assets such as gold and government bonds.

* Wall Street marked its worst day in 10 months amid massive trading on Friday as investors who had pinned their bets on Britain remaining in the EU were caught wrong-footed.

* The $2.08 trillion dollar loss across global equity markets was the biggest one-day fall ever, according Standard & Poor's Dow Jones Indices, trumping the Lehman Brothers bankruptcy during the 2008 financial crisis.

* Uncertainty surrounding when and on what terms Britain will end its membership is expected to fuel volatility in the next few weeks.

* European stocks were hammered for a second day and the sterling fell more than 2 percent. The dollar <.DXY> and gold rose, while the yield on the 10-year U.S. treasury bond <US10YT=RR> fell on Monday.

* The vote, which Federal Reserve Chair Janet Yellen had said would have significant repercussions on the U.S. economic outlook, is expected to reduce the Fed's ability to raise short-term interest rates.

* Traders see no chances of a rate hike in July and September and have priced a meager 1.9 percent bet on an increase in November, according to CME Group's FedWatch tool.

* Yellen is no longer due to speak at the ECB Forum on Central Banking starting on Monday, the second high-profile defection after the Bank of England's governor pulled out after the vote.

* Oil prices steadied but were still in the red on Monday as analysts said Brexit would have a limited impact on global fuel demand. [O/R]

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 24, 2016. REUTERS/Lucas Jackson

* U.S. banks remain under pressure. Citigroup, Bank of America and JPMorgan  were off about 1.8 percent each premarket.

* Cruise operator Carnival Corp's shares fell 4.9 percent to $43.41 after Susquehanna cut price target. The stock was the biggest loser among S&P components.

Futures snapshot at 6:53 a.m. ET (1053 GMT):

* Dow e-minis  were down 104 points, or 0.6 percent, with 66,486 contracts changing hands.

* S&P 500 e-minis  were down 12.25 points, or 0.61 percent, with 423,990 contracts traded.

* Nasdaq 100 e-minis  were down 32.25 points, or 0.76 percent, on volume of 45,158 contracts.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Saumyadeb Chakrabarty)

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