With 57% of the votes counted, the Greece referendum has ended in a decisive decision
NO / OXI 61.2%
YES / NAI 38.7%
source: ypes.gr (Greece interior ministry)
This is a clear rejection of the EU's latest offer, sending the EU back to the drawing board and giving PM Tsipras an even stronger mandate to negotiate a better deal for Greece.
Apparently the G7 won't have a statement until tomorrow, suggesting that they and many others have been caught off-guard by this clear rejection of past policies, and now need to go off to come up with a response. Apparently a number of meetings of leaders and finance ministers are scheduled over the next couple of days which could be dominated by the question: Now what do we do?
The next couple of days could be decisive not only in terms of what happens to Greece but could set the direction of the Eurozone for the next several years. It's now about more than just whether Greece will be able to stay in the Eurozone or not or what could happen to its banking system but also about what this means for the Eurozone project as a whole?
Clearly though, the ball has been pounded into the EU/ECB/IMF's court as to what to do next. Will they accept the decision of the people? Will they continue to support Greek banks? Will they agree to a writedown of Greek debt? And what could this mean for other countries. Clearly Podemos in Spain, Five Star in Italy, National Front in France and other Euroskeptic parties will likely be watching what happens in the coming days very closely. And don't forget the UK, Poland and Denmark have all elected Euroskeptic governments in recent elections.
The EU has already been fraying at the edges, so the next few days could represent a key turning point depending on how things trend from here. Because of this, indices and currencies around the world but particularly in Europe could be partciularly volatle in the coming days with the potential for trading swings and opportunities in both directions.
Early indications I picked up on Twitter have suggested EUR pairs could start the week lower on renewed uncertainty over how the EU will respond to this, and I wouldn't be surprised to see the DAX
, IBEX, MIB and CAC decline in the early stages of trading as well with the potential for a rebound if progress toward a resolution to this crisis is made overnight. US and Asia Pacific markets may also open lower but Chinese markets may be more impacted by responses to their ongoing market correction. US markets last week at least were less sensitive to their European counterparts on Greece related swings in both directions.