Daily Market Color June 27, 2016Holy Fish and Chips Risk assets are starting the week continuing to get hammered following last week’s shocking Brexit “Leave” decision. Friday’s global equity selloff flushed away over $2 trillion in global market capitalization, surpassing the Lehman Brothers bankruptcy as the largest one-day loss ever, and we don’t appear to have reached the bottom quite yet. Despite all the warnings from politicians and central bankers leading up to the referendum, it appears many British voters are feeling regret following the decision to leave the European Union. A petition to hold a second UK Brexit referendum had been gaining momentum, but David Cameron shot it down today, claiming Britain must begin formal discussions and move on towards a transition. Scotland’s government is also considering a referendum on its own independence, which would open up the possibility of breakup of the U.K as we know it, in addition to the breakup of the EU. The British pound continued its freefall versus the dollar, and is currently trading at below $1.32, levels not seen in over 30 years. While aftershocks from the Brexit decision dominate the headlines and trading sentiment, today we also kick off a busy week for US data releases. A report out today showed the US services sector remained subdued in June, with Markit’s Services PMI showing no change from May’s 51.3 reading. Analysts were expecting an increase to 52.0. The survey data also indicated that the economy likely grew at a pace of only 1% in the second quarter, with the manufacturing sector continuing to be a drag on the broader economy. Markets largely ignored the PMI data in the wake of the Brexit aftermath, but tomorrow’s official reading of GDP and some of the consumer data later in the week should warrant attention. All three major US stock indexes are currently down between 1.5% and 2.0% on the day after being down 3 to 4% Friday, while Treasury yields and swap rates are 4-15 bps lower across all major maturities (following a 16-20 bp rally Friday), trading in a bull flattening pattern. Both WTI and Brent crude are trading lower over 3%, while spot gold is up over 0.50%.