Markets React to Greece's 'No' Vote

The Wall Street Journal

Updated 6 July 2015 at 4:10 pm

More than 61% of Greeks voted “no” in a referendum on whether to accept creditors’ demands, setting the country on a collision course with the rest of the eurozone.

Voters were asked to vote on economic policy demands from creditors including the International Monetary Fund and the European Central Bank.

On Monday morning, Greek finance minister Yanis Varoufakis resigned, saying he had been made aware "of a certain preference by some Eurogroup participants, and assorted ‘partners’, for my… ‘absence’ from its meetings."

European markets opened lower on Monday but the losses were not as steep as many investors and analysts had feared. The same held true when trading reached U.S. shores.

Here's how it all went down.

4:10 pm | Thanks for joining us | by Erik Holm

We'll call it a day there, folks. Thanks for joining us.

4:09 pm | More volatility ahead | by Kristen Scholer

The market reaction today may not have been as severe as some feared, but stayed tuned in the days and weeks ahead. Markets are expected to be volatile in coming weeks as Greece tries to strike a deal with its creditors, pay two looming debt payments to the ECB on July 20 and August 20 and keep its banks from failing.

Kathy Jones, chief fixed income strategist at Charles Schwab Corp., says there’s likely to be a lot of noise in coming days surrounding Greece and advises investors not to overreact.

“Investors should keep their longer term asset allocation plan in mind, rather than try to react to every headline,” she said. “For investors that are underweight Europe, major weakness in European stocks is likely a buying opportunity to get to a neutral allocation, keeping in mind that markets are apt to remain volatile in coming weeks.”

4:08 pm | Meanwhile, bitcoin | by Erik Holm

Meanwhile, bitcoin is up about 7% over the past four days. For what that's worth.

(It's currently worth $272.42.)

4:08 pm | Market close | by Kristen Scholer

Stocks finished down Monday, but closed off their lows. The S&P 500 ended off 0.4%, the Dow Jones Industrial Average and Nasdaq Composite both lost 0.3%. As traders took a risk-averse approach, bonds and gold rose.

Volatility advanced to nearly as high as 19, but didn't eclipse Tuesday's peak of 19.8 when Greece defaulted on a payment to the IMF.

WTI Crude Oil had its worst day in five months, sliding 7.3%.

3:52 pm | Heard on the Street | by Paul J. Davies

Greece’s banks are running desperately low on cash. They went into the weekend with just €1 billion ($1.11 billion) available to depositors, according to the national banking association. Depending on the pace of withdrawals, they now have a day or two at best.

The ECB decided not to allow more emergency funding Monday with Greece’s bailout currently dead. It did, though, demand that Greek banks post more collateral against existing emergency loans. This leaves them less able to borrow more in the future and puts them in an even tighter spot.

The banks are being slowly throttled—while their liquidity is frozen, the cogs of the economy stick and squeal and any economic activity avoids the banks as far as possible. An unusable payments system might spook tourists into canceling holidays, cutting off Greece’s main source of income.

3:31 pm | About that rather muted market reaction | by Daisy Maxey

If the Greek government is now feeling more confident in its negotiating position, it should ask itself the meaning of the surprisingly subdued reaction of global capital markets, says David Joy, chief market strategist at Amerirprise Financial. Investors have concluded that it matters little, at least in economic terms, if Greece does exit the eurozone, he says. Greece better hope that European leaders' desire to keep the eurozone intact for political reasons is a more powerful incentive to finding a solution than are the financial concerns, Joy says.

3:25 pm | IMF headlines | by WSJ Staff

Now it's the IMF's turn. Here are the latest headlines hitting the tape:

*IMF: Fund Chief Lagarde Discussed Greek Referendum with Prime Minister Tsipras Monday

*Lagarde Told Tsipras the IMF Can’t Disburse Bailout Cash Until Greece Clears its Arrears – IMF

*Lagarde Offered Tsipras Technical Assistance - IMF

3:24 pm | U.S. vs. Europe: Where will the money flow? | by Kristen Scholer

U.S. stocks aren’t struggling as bad as their European counterparts since Greek tensions heated up a week ago. Tobias Levkovich, chief U.S. equity strategist at Citigroup Inc., thinks that may continue.

“Mutual funds and exchange traded fund flows into Europe could face obstacles as the uncertainty factor restrains new inflows and a larger unwinding of positions might perversely sustain American share prices,” he said.

Mr. Levkovich is among stock strategists predicting the S&P 500 will end 2015 higher. Despite the Greek drama, he maintains his view that the large-cap index will finish the year at 2200, representing a 6.9% gain on the year. The S&P 500 is now up 0.3% year-to-date.

3:11 pm | Supply and demand | by Charles Forelle

In Athens, there are few, if any, signs of shortages on store shelves. But further up the supply chain, importers and wholesalers warn that the flow of goods into Greece has sharply slowed.

Comeco SA, a meat supplier and processor on the island of Corfu, imports beef, pork and chicken from around Europe to meet a demand that far exceeds the domestic supply. “They don’t load the trucks before they see the money,” Spiros Vlachos, general manager, says of his foreign suppliers.

Mr. Vlachos says he has inventory for now, but the clock is ticking. “If they keep the banks closed, we will have serious trouble,” he said. “The longer it goes, the worse it will get.”

No money in banks can leave Greece, so importers can’t write checks or wire payments for goods. Some customers offer to pay cash, but it’s impractical to handle large quantities, and there’s no way to get it overseas.

One import agent has three dozen containers of lamb en route to the port of Piraeus by sea; they were diverted when capital controls descended last week. They won’t be delivered until he can pay.

Crucially, the country’s capital controls have opened up a gulf in value between euro notes and bank deposits in Greece. In normal times, a €20 note is worth the same as €20 in a bank account. These are not normal times.

“We have the money, but our hands are bound,” says Maria Mavrikos, who is in charge of imports and exports at Mavrikos Imports SA, a company in Piraeus that supplies food and spirits to ships and locally. “The money is only on the screens of computers, not real money.”

Ms. Mavrikos can’t pay her foreign suppliers. “They are afraid” of sending goods without payment, despite a long business relationship, she says. “I understand. I would do the same.”

Ms. Mavrikos is concerned that if the Greek banks collapse, her company’s deposits would go with them. So she is trying to pay domestic obligations with electronic transfers, which are permitted inside Greece. “It’s dangerous to have money in your account,” she says. “We are trying to get rid of it.”

2:34 pm | ECB Maintains Cap on Emergency Loans to Greek Banks | by Brian Blackstone

The European Central Bank maintained a cap on emergency loans to Greek commercial banks that has been in place for more than a week and raised the amount of collateral the banks must post for the credit, a decision that should force the banks to keep their doors closed in the coming days with tight limits on ATM withdrawals.

The ECB's decision, made during a conference call of the bank's governing council Monday, came one day after Greek voters voted overwhelmingly to reject demands for economic overhauls and fiscal cuts made late last month by the country's international lenders. On June 28, the ECB froze emergency liquidity assistance, or ELA, to Greek banks at about EUR89 billion, or about $99 billion, where it has stayed since. "The financial situation of the Hellenic Republic has an impact on Greek banks since the collateral they use in ELA relies to a significant extent on government-linked assets," the ECB said in a statement, explaining its decision to adjust the amount of collateral banks much post for ELA. However, the adjustment wasn't aggressive enough to force Greek banks into failure and they still have sufficient assets to post as collateral for the existing EUR89 billion stock of emergency lending, according to a person familiar with the matter.

2:24 pm | Germany has a lot to lose | by Andrea Thomas and Bertrand Benoit

When Chancellor Angela Merkel joins her fellow European leaders in Brussels on Tuesday for talks that will decide whether Greece can keep the euro, the cost of failure will be at the back of her mind.

Should the talks collapse and Greece stumble out of the eurozone, every member state stands to lose the loans extended as part of Greece’s past bailouts—a factor that could help sway the negotiations one way or another.

Yet, while many countries might see the price of failure as an incentive to seek an amicable deal, Germany, which has taken the lead in shaping Europe’s answer to the eurozone crisis for the past five years, faces a less clear-cut calculation.

The German government hasn’t published estimates of how much it could lose in case of a default, arguing that this scenario could unfold in too many different ways. Based on available data, however, the Munich-based Ifo economic institute puts total German exposure to Greece, including the loans and a host of other liabilities, at €88 billion ($97 billion), while rating agency Standard & Poor’s estimates it at €90.6 billion.

This would make Germany Greece’s largest creditor in the eurozone and the country with the most to lose from a Greek default. But because of factors ranging from Germany’s good fiscal position—it is currently generating a budget surplus—buoyant tax revenues, and the fact that many loans to Greece aren’t set to mature for many years, many economists argue that Berlin would weather a Greek default largely unscathed.

The hit “would hardly be noticeable for Germans,” said Jens Boysen-Hogrefe, economist with Kiel-based institute Ifo.

2:23 pm | What it all means to the U.S. | by Michael Derby

While Fed officials have spent more time acknowledging the international implications of their policy choices, we haven't heard much from them about what the Greek crisis means for America. A destabilizing influence on Europe's economy and global markets suggests trouble for the U.S. by most reckonings. But last week, St. Louis Fed boss Bullard indicated there could be a stimulative boost to the U.S. from a contained Greek problem.

"I see the U.S. as being a likely beneficiary of the situation in Greece. It's not that I take joy in that, but that's the way the global macro economy tends to work," he told reporters. Bullard explained worried investors tend to pile into Treasurys, which then lowers borrowing costs. By and large, Bullard says there's little chance Greece derails U.S. economic growth.

2:13 pm | How do you say 'goodbye' in Greek? | by Paul Vigna

Dan Alpert, managing partner at Westwood Capital, had this to say about the latest batch of Greece-related headlines:

With the #ECB showing no willingness to increase the #ELA to Greek banks, and Merkel taking a hard line, it is time for Greece to move on.

— Dan Alpert (@DanielAlpert) July 6, 2015

2:07 pm | Just one question: what's it mean for the ATMs? | by Paul Vigna

Greeks took a stand on Sunday, and someday, they certainly hope, they will be paid for it, either literally or figuratively. That day isn’t Monday.

The ECB announced a decision to keep its current ceiling in place for its emergency liquidity assistance program, or ELA, to Greek banks, and to “adjust” the haircuts on collateral posted by Greek banks for that assistance.

The ECB has held its daily funding level flat at 89 billion euros a day since June 26, and was expected to revisit the program after assessing the results of the referendum.

The adjustment to the “haircut,” or the amount the banks have to put up, is noteworthy, as it will almost certainly make it harder for banks to apply for and receive the loans, and consequently force them to keep their doors closed, our Brian Blackstone noted. The ECB, though, said the banks still have enough qualifying capital to post for the loans.

What’s all that mean, effectively? “No new money in the ATM,” Lindsey Group’s Peter Boockvar said.

2:03 pm | Demand for Treasurys | by Min Zeng

After an earlier pullback, haven demand is perking up again in the afternoon trading, sending 10-year yield closer toward the session low of 2.274% made during Asian session.

Ms. Merkel stance on Greece is part of the reason, as she says the door remains open to talks but conditions are not met for new Greek proposal.

Meanwhile, the ECB adjusted haircuts on emergency loans to Greek banks, adding more pain to the sector. Still, the ECB is signalling it stands ready to act if turmoil worsens.

The yield on the 10-year Treasury note was recently at 2.296%, vs 2.393% on Thursday.

1:55 pm | ECB's turn | by WSJ Staff

Now it’s the ECB’s turn to weigh in:

*ECB Says It Has Kept Ceiling in Place for Level of Emergency Loans to Greek Banks

*ECB Says It Decided to Adjust Haircuts on Collateral Posted by Greek Banks for Emergency Loans

*ECB Says It is ‘Closely Monitoring’ Financial Mkts, Ready to Use All Available Tools if Needed

1:45 pm | Greece ETF sees more carnage | by Kristen Scholer

The last two Mondays have not bode well for the Global X FTSE Greece 20 exchange-traded fund, which tracks the Athens Stock Exchange’s 20 biggest companies by market cap and trades on the NYSE Arca under ticker symbol "GREK."

Today the ETF is down as much as 10% following Sunday's 'no' vote, and the previous Monday it shed as much as 20% after the eurozone denied an extension to Greece's bailout. With today's losses, GREK is poised to close near a three-year low.

1:43 pm | Stocks drops as Merkel speaks | by Paul Vigna

U.S. stocks have taken a dog-leg turn back down, with the Dow off 90 points at17640, and S&P 500 down 13 at 2063.

"Shortly after 1:00, there were reports that Merkel might make a statement at 1:15 [New York time]" Art Cashin wrote. "I have not seen any details but at 1:15 is when they accelerated to the downside."

The traders may have had the timing off, but not the substance. Headlines are indeed crossing the Tape right now. Mr. Merkel, Germany's prime minster, seems be offering both the carrot and the stick here. She said the door remains open to negotiations, but the Greeks have not yet met the "conditions" for a new program. She also said the last creditor proposal "was very generous" - presumably she's referring to the proposal that died with last Tuesday's expiration of Greece's bailout program, and which was rather resoundingly rejected on Sunday by Greek voters.

She then added that all parties need to be responsible, and show solidarity on Greece.

1:39 pm | Headlines from Merkel, Hollande | by WSJ Staff

Some headlines are hitting the tape as Ms. Merkel and Mr. Hollande emerge from their evening strategy meeting:

*France’s Hollande: Greece Needs to Make Credible Proposals for 'Durable' Agreement

*France’s Hollande: Not Much Time For Greece and Europe to Reach Deal

*Germany’s Merkel: Greece Needs to Make Concrete Proposals at Brussels Meeting

*Germany’s Merkel: France, Germany Need to Find Shared Solution

*Merkel: Door Remains Open to Talks, But Conditions Not Met for New Greek Program Yet

*Merkel: The Last Proposal to Greece from Creditors Was Very Generous

*Merkel: Everyone Must be Responsible, Show Solidarity on Greece

1:25 pm | Medicine shipments to continue | by Ed Silverman

Despite the uncertainty facing the Greek economy, the leading pharmaceutical industry trade group in Europe maintains that shipments of medicines will continue. At the same time, the group is pressing the European Commission to take steps to ensure that prices and supplies are not disrupted if Greece introduces its own currency.

For more on that topic, click here.

1:21 pm | White House thinks it'll take another bailout to keep Greece in the eurozone | by Paul Vigna

Some headlines coming out of the White House, as relayed by our colleagues in D.C.:

DJ White House: Greece, Eurozone Creditors Should Continue to Work on an Emergency Bailout Package

DJ White House: Greek Bailout Needed to Keep the Country in the Eurozone

DJ White House: U.S. Position on Greece Hasn’t Changed in the Wake of Greek Referendum

DJ White House Comments Follow Greek Voters’ Rejection of Creditor Bailout Terms

DJ White House: Greece Needs to Deliver on its Previous Economic-Overhaul Commitments

DJ White House: It Is in U.S. and Global Interests That Greek Crisis Be Resolved

DJ White House Press Secretary Declines to Say Whether Greece Should Receive Debt Relief

DJ White House: Greek Crisis Is for European Authorities to Resolve

DJ White House: Solution to Greek Bailout Impasse Requires Greece’s Debt Be Sustainable

1:05 pm | Watching the numbers | by Paul Vigna

Been watching the S&P 500 hug the 2072 mark, after their brief foray into the green. Likely they are trying to avoid another test of the numbers that lie below. Likely that is what the bears will try and force.

Currently, the index is trading down 7 points, or 0.3%, at 2070. "Stocks drift as the 'next step' is awaited," UBS' Art Cashin wrote in a midday note.

The morning's low was 2059, and the high was 2080. That higher level was previously the bottom of a range that the market had been trading in for three months. Absent some real breakthrough in the Greek crisis, it's hard to see how traders will muster up the muscle to push the index back into that range for long.

Will be very interesting should the bears force a retest of the lows.

12:58 pm | Germany vs. France | by Gabriele Steinhauser and Andrea Thomas

Some relief for Greece on paying off a debt load that stood at 177% of gross domestic product at the end of last year would allow Mr. Tsipras to deliver new concessions to the country’s voters. But it could prove expensive for other governments, both financially and politically. Initial reactions Monday pointed to a split between the eurozone’s two biggest economies.

“A haircut [on Greece’s debt] is not on the table for us,” Martin Jäger, the spokesman of German Finance Minister Wolfgang Schäuble said, reiterating the long-held view of the government.

France’s finance minister was more sympathetic. “I’ve always said talking about debt is not a taboo,” said Michel Sapin. “The burden of debt in the coming months and years is too high for Greece to be able to pick itself up again.”

12:54 pm | Don't count out European stocks | by Kristen Scholer

Market participants say the recent pullback in U.S. stocks should present a buying opportunity. The same may be true for European equities even amid uncertainties about how Greece’s debt problems will affect the euro region.

“Even if a deal ultimately fails, the economic basis for further European equity market improvement should remain, especially if Europe produces proactive policy responses,” said Paul Christopher, head of global market strategy at Wells Fargo Investment Institute.

12:43 pm | Grexit now BNP Paribas's base case | by Chiara Albanese

Greece exit from the eurozone has now become the main base case scenario BNP Paribas. Economists at the bank expect that in this case the European Central Bank with additional monetary easing. “This will be negative for the euro,” they say. BNP also expects the Federal Reserve to delay the start of policy normalisation until December. “However, rates markets are already priced that way, implying little near-term damage for the dollar,” they say.

12:27 pm | Banks to stay closed two more days | by Dow Jones

Greece To Extend Bank Holiday For Two More Days -- Head Of Greek Bank Association

12:26 pm | Earnings more important to U.S. investors than Greece - BlackRock | by Chiara Albanese

Markets’ uncertainty over the future of Greece will “undoubtedly lead to a sharp, negative reaction from investors,” says Russ Koesterich, BlackRock’s Global chief investment strategist.

However, he doesn't believe that the outcome in Greece poses a longer-term threat to the global economy or financial markets. Or that it will take center stage in investors’ minds.

“Perhaps more important for U.S.-based investors will be the outcome of second-quarter earnings,” he says, adding that with estimates coming down aggressively, the U.S. economy recovering and dollar strength moderating, companies should have an easier time beating estimates this quarter.

12:22 pm | The Franco-German talks | by Matthew Dalton and William Horobin

At the top of the agenda for the meeting this afternoon between Angela Merkel and François Hollande will be what to do about Greece’s mountain of debt.

Germany has insisted that Greece repay its debts or be cut off from more lending from the eurozone. France argues that Greece needs debt relief as part of a new bailout program.

The French plan is to extend maturities on Greek debt and cut interest rates, but keep the face value of the debt the same. Even that may no longer be possible: The International Monetary Fund, in an analysis of Greece’s debt released last week, said cuts to the face value will be necessary to ensure the government’s repayment burden is manageable if economic conditions in Greece continue to deteriorate.

Ms. Merkel is seen as among the most dovish figures in the German government. While others, including Finance Minister Wolfgang Schäuble, are more ready to let Greece leave the eurozone, she is wary.

The two are due to release a statement after their meeting.

12:16 pm | Germany stays tough | by Gabriele Steinhauser and Andrea Thomas

Germany's vice-chancellor and leader of the Social Democrats, Germany's junior coalition partner, struck a pessimistic note on the likelihood of reaching a deal before the next big payments to creditors.

"The ultimate insolvency of the country seems to be imminent," said Sigmar Gabriel, who's also Germany's economic minister. "We all know that it is pretty much impossible" for Greece to pay back its debt in the near- and long-term, he said.

Any proposals on how a financial breakdown could still be avoided would have to come from the Greek side, Mr. Gabriel said. "The ball is now in Athens's court," he said.

The first outlines of Greece's plan were emerging Monday. In the afternoon, Mr. Tsipras met with the leaders of the opposition parties to agree on a common proposal to present to eurozone leaders Tuesday. A Greek government official said that the plan included a commitment to restructure the debt.

In a rare sign of unity, they decided in a seven-hour meeting that Greece's common goal is to cover financing needs and go ahead with reforms "with the least possible recessionary impact."

12:10 pm | Facebook Q&A with Simon Nixon | by WSJ Social

What’s next for Greece? Our chief European comment writer, Simon Nixon, will be taking questions tomorrow about the economic crisis in Greece, and the implications of the “No” vote Sunday. The FAcebook Q&A will run from 11 a.m. to noon EDT (4p.m. – 5p.m. BST) Tuesday.

Submit questions via this link.

11:52 am | Portugal: Not in our interest to be associated with Greece | by Patricia Kowsmann

Greece must propose an acceptable solution to solve the crisis it is in, and while Portugal offers solidarity to the country, it isn't in its interest to be associated with a state that has defaulted, Deputy Prime Minister Paulo Portas said Monday.

"Portugal isn't Greece and the situation in Portugal isn't comparable with Greece's," Mr. Portas told party members at an event, rebuffing calls from the opposition parties that it should help Greece seek better terms in negotiations with creditors for more aid.

Mr. Portas said the government "must defend the interest of the Portuguese in the first place," which means not associating itself with the situation of Greece, which last week defaulted on a loan payment to the International Monetary Fund. Portugal, meanwhile, is paying back its loan to the institution earlier than expected, he said.

Earlier Monday, main opposition Socialist leader Antonio Costa called on the government to take a "constructive position" on Greece, adding an agreement between Greece and creditors must be reached so the country can remain in the euro zone.

Portugal is holding general elections later this year, and Mr. Costa's Socialists are slightly ahead in opinions polls, followed by the ruling coalition party headed by Prime Minister Pedro Passos Coelho.

11:42 am | Investors cut exposure to eurozone equities | by Chiara Albanese

Some investors are decreasing equity exposure. Among them is Candriam Investors Group, which has been implementing hedging strategies or reducing exposure to eurozone equities. “After a strong overweight during the first months of the year, we now are neutral on the region,” says Nadège Dufossé, head of asset allocation. On the bond side, the asset manager is neutral on peripheral countries.

“We also reinforced our exposure to USD at the beginning of last week, which we still consider a good hedge against tail risk in the case of a Grexit.”

11:40 am | The latest portmanteau is "Grimbo" | by Paul Vigna

Do you think the Fathers of Greece, way back in the mists of time, knew that they'd be creating such a portmanteau-rich environment when they were naming their nation?

We just came across a new one: "Grimbo," i.e., Greece and limbo, i.e., the figurative state in which the actual state of Greece, and by extension Europe, finds themselves now that the vote is over, but the crisis remains unresolved.

Here's a note from Citi Private Bank:

No quick exit from the Eurozone will be triggered by the latest events. Rather, a quite fluid situation emerges that some may describe as a limbo or “grimbo.” While market volatility outside Greece will most likely rule in coming days, we continue to see the financial backdrop for Europe and the world as less vulnerable to a Greek shock then was the case in 2011, when Greece’s debt saw an orderly restructuring amid severe market pressures. Greece’s contraction generated severe market volatility but no broad economic spillovers inside the core Eurozone or outside during those years. With private holdings of Greek debt dramatically reduced since 2011, it may be a sad irony that macro-level steps to strengthen the Eurozone recovery are only now taking place. (These include ECB QE and mitigated fiscal rebalancing programs). It is possible with Sunday’s vote that Greece never sees these benefits.

11:20 am | #MinisterOfAwesome | by Matina Stevis

Just three-and-a-half hours after controversial Greek finance minister Yanis Varoufakis resigned, his London-based book agents sent around a public-relations email offering excerpts from his updated book, the Global Minotaur, and other pieces of information.

The communications director at Zed Books, the publisher of Mr. Varoufakis’s book, sent your correspondent an email describing Mr. Varoufakis as the “possibly the coolest, charismatic and most intelligent Finance minister ever” and even suggested a hashtag: #MinisterofAwesome.

Greeks on social media responded angrily to what they saw as aggressive self-promotion by Mr. Varoufakis, an architect of the country’s current negotiating conundrum with its creditors.

11:18 am | U.S. leaders seem to be missing the point on Greece | by Paul Vigna

Interesting commentary from Heather Conley at the Center for Strategic & International Studies, about what the U.S. has done, or rather, consciously not done, in the Greek crisis, and what U.S. leadership doesn't seem to understand:

"Some have suggested that the United States is a 'helpless bystander' to this modern, Greek tragedy but in reality, the United States has become an increasingly detached, indifferent, and self-absorbed power which has expended enormous blood and treasure over the past century to support European stability but now seems perfectly contented to walk away. America is a European power in the sense that much of its economic, political and military strength is amplified by a strong Europe and reduced by a weakened Europe. America’s geopolitical and geo-economic exposure to the impact of events in Greece and Europe today are great – a reality that President Truman and Secretary George Marshall understood so well, but which seems lost on this generation of U.S. leaders."

11:13 am | Buy the dip? | by Kristen Scholer

With U.S. stocks down 2.6% from their May 21 high, should investors buy the dip?

Gina Martin Adams, equity strategist at Wells Fargo Securities, thinks the disruption surrounding Greece is likely to lead to a sell-off worth buying. But she believes investors should wait for the Federal Reserve, the ECB or both to "save the day," as she says, before stepping in to take advantage of a pullback in U.S. stocks.

10:57 am | Changing investing landscape | by Kristen Scholer

After lagging European stocks in the first quarter amid calls from hedge-fund titans that greater opportunities were abroad, U.S. stocks are acting more resilient in the past three months. Specifically, since June 26, the S&P 500 is up 0.5% while the STOXX Europe 600 is off 4.3% as uncertainties boil about how Greece's debt drama will affect the euro region.

"We continue to recommend closing off the short US, long Europe trade," said Sean Darby, chief global equity strategist at Jefferies. He called Sunday's 'no' vote a surprise, saying equity markets were positioned for a quick, positive resolution on Greece's bailout terms. Instead, it appears Greece and its creditors are entering a "protracted period of creditor-debtor negotiations," Mr. Darby said.

10:47 am | So much for that | by Erik Holm

The S&P, Dow and Nasdaq are now all positive on the day.

10:41 am | The two sides are set to talk | by WSJ.com

Greece’s premier Alexis Tsipras spoke over the phone with German chancellor Angela Merkel on Monday, a senior government official said, and the two leaders agreed that the Greek premier will present new proposal during a European Union summit on Tuesday in Brussels.

French finance minister Michel Sapin said there is still a basis for talks and urged the Greek government to make proposals so that negotiations can restart. If Greece makes serious, solid proposals and European countries offer concessions—including finding ways to lighten the country’s debt burden—there is a basis for discussions, Mr. Sapin said on French radio RTL.

10:39 am | For stock bulls, hope springs eternal | by Paul Vigna

Never let it be said that equities traders are not eternal optimists.

After opening down sharply, U.S. stock traders are already circling the proverbial wagons, looking to arrest the lake of red that's spilled over equities the past few weeks. Their rallying cry? 2058.

"Bulls hope that today's opening low in the S&P at 2058 is close enough to the June 30 intraday low of 2056 to constitute a retest," wrote UBS' Art Cashin, who runs the bank's floor operations at the NYSE. "Probably too early for an all clear yet," he cautioned. "Athens remains unresolved."

Instinet's Frank Cappelleri also noted the early low is close to both last week's low and the 200-day moving average at 2055. "So far..." he added.

10:39 am | U.S. outperforms | by Kristen Scholer

Even though U.S. stocks are lower Monday, they aren’t faring as bad at their European counterparts. In fact, after significantly underperforming European bourses during the first three months of the year, the S&P 500 has beaten the STOXX Europe 600 by about 5% since the start of April.

Beginning of April through Monday

-S&P 500: 0.3%

-STOXX Europe 600: -4.4%

First-quarter performance

-S&P 500: 0.4%

-STOXX Europe 600: 16%

10:36 am | Lagarde is ready to help | by MarketWatch

The International Monetary Fund stands ready to assist Greece, the international financial agency's chief Christine Lagarde said on Monday. "We are monitoring the situation closely and stand ready to assist Greece if requested to do so," Lagarde said in a brief statement.

10:34 am | Update on the European markets | by Phillipa Leighton-Jones

Here’s a quick update on the markets:

Dax now down 1.07%, CAC down 1.52%, FTSE MIB down 3.47%; EUR/USD trades down 0.66% at $1.104; gold is up 0.15%; Bund yields are just lower at 0.77%; Yields on Spain’s 10-year government debt now up 0.08% at 2.317%, Italy’s up 0.08% to 2.339%, Portugal up 0.17% at 3.113% and Greece”s thinly-traded 10-years now up 3.25% at 17.616%.

10:19 am | Flashes from Athens | by Phillipa Leighton-Jones

Greek Political Leaders Agreed On Draft Document Monday -Independent Greeks Party Leader Kammenos

Leaders From Syriza, Independent Greeks, New Democracy, Potami, Pasok Signed Common Draft -Kammenos

Common Draft Document To Be Published Shortly -Potami Leader Theodorakis

We Will Prove Wrong All Those Who Think EU Can Exist Without Greece -Potami Leader Theodorakis

Leaders' Draft Includes Commitment on Debt Restructuring - Govt Official

We Call ECB To Take Into Consideration A New Effort To Start Negotiations Again -Theodorakis

Our Goal Is To Help the Govt Bring the Deal It Has Promised - New Democracy's Meimarakis

10:16 am | 'A one-off shock' | by Daisy Maxey

The Greek referendum is likely more of "a one-off shock" to European markets than a major systemic crisis, says Paul O'Connor, co-head of Henderson Global Investors multi-asset team. Greece accounts for less than 2% of eurozone GDP and direct private exposure to Greece is modest, O'Connor says. The ECB is better equipped to stem contagion than it was in 2011 to 2012, and would likely react forcefully if market turbulence leads to a warranted tightening of monetary conditions, he says.

Still, it's right to remain cautious until the situation has been more clearly resolved since few investors constructed portfolios with a Greek "no" vote in mind, and most are likely to be reducing risk at this time of the year, he says.

10:08 am

I hear the #Greeks have hit the beaches today. "No use in going to the office, nothing to do," says engineer friend of mine #CapitalControl

— Stelios Bouras (@SteliosBouras1) July 6, 2015

10:05 am | Risk aversion takes hold | by Kristen Scholer

As U.S. stocks fall, traders are taking a risk-averse stance, putting money toward bonds, the U.S. dollar and gold.

The U.S. 10-year Treasury yield, which moves inversely to its bond price, is at its lowest level in two weeks at 2.3%. Meanwhile, the U.S. dollar and gold are up fractionally.

Those gains come as riskier, growth-oriented sectors like energy, financials and techs are lagging.

9:59 am | An S&P 500 selloff cheat sheet | by Paul Vigna

What are the speed bumps for the S&P 500 as it retraces the gains it has built since January? Instinet’s Frank Cappelleri provides a cheat sheet:

2,056 – Recent low 2,055 – 200-Day MA 2,040 – March low 2,014 – 38.2% retracement level 2,010 – Upward sloping trading channel target 2,009 – Bearish flag target 2,000 – Sideways trading range target

The index fell to as low as 2059 in the first minutes of trading, and is now down 11 points at 2066. At these levels, and after the recent selloff, it’s in a place where it hasn’t been since early in the spring, and given all the damage in the last few weeks, traders will be on the prowl for good deals.

“This predicted stock market sell-off and the resulting drop in prices will, of course, create an important buying opportunity, especially for investors with a longer-term perspective,” said deVere Group CEO Nigel Green.

9:51 am | Market volumes in Europe are still quieter than last week | by Phillipa Leighton-Jones

Bats Chi-X Europe, the stock exchange, says it’s still relatively quiet out there compared with last Monday. Germany’s DAX (down 1.32%) and France’s CAC (down 1.88%) have picked up the bulk of the volumes, with around €4 billion traded in each, while Italy’s FTSE MIB (down 3.54%) has seen €3.4 billion traded and the FTSE 100 (down 0.69%) €3.8 billion. Other markets are in line with usual (quiet) July volumes.

9:47 am | Volatility on the rise | by Kristen Scholer

U.S. stocks are off 0.6% shortly after Monday’s open with volatility up 5.1% as investors grapple with uncertainty surrounding Greece’s future in the eurozone and possible contagion if the country leaves. Losses for the major indexes add to declines across the globe. European bourses are down roughly 1.3%.

Gennadiy Goldberg, U.S. strategist at TD Securities, says the path forward for Greece remains murky, which should lead to increased volatility throughout the week.

9:43 am | Fallout may be limited | by Daisy Maxey

The worst is probably ahead for Greece, but there’s unlikely to be any major economic, financial or political ripple effect for global investors from its “no” vote on bailout terms, writes David Kelly, chief global strategist at JPMorgan Funds. Greece has infuriated many of the European leaders it will need to convince to negotiate any further deal, and it’s dangerous for it to assume that other European governments are bluffing, Kelly says. But other issues will likely govern the path of global financial markets in the weeks and months ahead though they will presumably react negatively to the uncertainty caused by the vote, he says. In the US, the most important issues are economic growth, interest rates and corporate earnings, he says.

9:36 am | Italy's banks are losing | by Giovanni Legorano

Losses on Italy's FTSE MIB index are accelerating, down 3.5% at 21,728, dragged down by banking stocks, in line with other European indexes.

Intesa Sanpaolo shares have been suspended from trading due to large declines, with a theoretical loss of 5.2%.

Banca Monte dei Paschi di Siena shares were also suspended during the first part of the session, but then started to trade again, shedding 9%. Other losers are UniCredit, down 5.1% and UBI Banca, off 6.1%.

9:18 am | U.S. market bent, but not broken | by Paul Vigna

U.S. markets are a shade of red, to be sure, but look about the same as their counterparts across the pond. So, we are braced for selling over here. S&P 500 futures are currently off 16 points, and Dow futures are down about 150. The markets broadly speaking lost about 1% last week, and could lose that today. Meanwhile, the yield on the U.S. 10-year Treasury note has fallen to 2.30% amid a flight to safety.

How far this all goes is a wide-open question, of course. But here are some likely mile-post markers.

Despite all the recent anxiety, the S&P 500 goes into Monday's session down only about 2.5% from its May all-time highs. If the futures do point to where the cash market is headed - they don't always do so - then the market is going to start testing some levels it hasn't seen since most of the nation was still frozen in ice.

Look around 2050 on the S&P 500. That level had been tested in March and April, and held, setting up a move to the May highs. If the current selloff goes below there, Greywolf's Mark Newton advised, the next area of support from a trading perspective lies around 2024, the March intraday lows.

If the market goes even lower, it would start testing the year's lows. In January, the S&P traded below 2000 amid an early sell-off, a range it hasn't visited since.

9:18 am | Greece complicates the Fed's job | by Min Zeng

Over in the U.S., uncertainty about Greece is complicating the Fed's plan to raise short-term rates for the first time since 2006. Thursday's U.S. employment report showed flat wages for June, bolstering expectations the central bank would continue to be patient in starting the hike cycle.

The yield on the 2-year Treasurys, among the most sensitive to changes in the Fed's interest-rate outlook, have fallen to 0.593% today from 0.637% on Thursday; overnight it hit a 7-week low of 0.565%. Meanwhile, Fed-funds futures show investors and traders how see only a 12% likelihood of a September rate hike, while December odds are at 46%.

9:16 am | This isn't a walk in the park for the ECB | by Nicole Lundeen

Ensuring Greek banks have liquidity isn’t about bailing out banks, but ensuring the circulatory system of the Greek economy is functioning, ECB Governing Council Member Ewald Nowotny says Monday in a radio interview.

The Greek banks are running out of liquidity and can’t be kept closed indefinitely, he adds. In principle, it’s the ECB’s job to keep the financial system flowing, but only under certain conditions, he says.

Mr Nowotny adds that he is certain what the ECB has done so far is correct and doesn’t break the rules, but any actions have to be reconsidered each time. “The developments in Greece doesn’t make it easier for us, I fear,” Mr Nowotny says.

9:02 am | 1953 vs. 2015 – A tale of two debt reliefs | by Giles Turner

German Chancellor Andrea Merkel is on her way to Paris to begin talks with French counterpart François Hollande regarding Greece’s shock ‘no’ vote on Sunday. It may seem hard to believe, but just over 60 years ago, it was Greece talking with France about the fate of Germany’s economy.

In the 1953 London Conference, a group of European officials – including a representative from Greece – wrote off a major portion of West Germany’s debt. Fast forward over half a century and the tables have turned. However, Greek politicians have yet to convince its major creditors to restructure its debt.

Understandably, the two events have a seemingly poignant connection. A number of politicians, commentators, and well-known economists have used the 1953 Conference as a case study to why Germany should relax its demands on Greece.

Here's a closer look at the parallels between the two situations.

8:52 am | Greece heading out of the eurozone, says Columbia Threadneedle | by Chiara Albanese

The Greek government will be unable to pay back to the European Central Bank the debt on July 20, says Columbia Threadneedle. This will reduce exponentially the prospect that Greece will continue to be a full member of the eurozone as the country will need a secondary currency for transactions, according to Toby Nangle, head of asset allocation.

“From a market perspective it is a challenge to understand the prospective channels for contagion,” he says, adding that financial market contagion typically spreads when assets that are understood to be risk-free turn out not to be so. But in Greece, those channels are political, and sentiment-based. “Both are harder to analyse,” he says.

8:49 am | A Grexit might actually drive the euro up in the long-run | by Paul Vigna

For weeks now, Dennis Gartman, who edits and publishes the daily Gartman Letter from Virginia, has been making one point repeatedly: that Germany wants to keep Greece in the euro because the latter helps offset (to some extent) the strength of the former and keeps the euro cheaper, although in the wake of Sunday's vote, nobody knows whether that will make any difference any more:

"We know that a 'Greece-less' EUR shall be a more expensive EUR, but shall Greece be forced to leave the single currency, or shall it remove itself of its own volition, or shall it chose to stay? We’ve no idea at this point. We know too that a EUR with Greece in it shall be Germany’s political and economic wish for Germany needs Greece in the single currency to keep it cheaper than it would be otherwise and thus benefitting Germany’s exporters, but can Greece remain in the single currency under the present circumstances… does it really want to?"

8:42 am | Peripheral spreads to widen further, says Goldman | by Chiara Albanese

Even if markets price action in the morning has been mostly muted, despite Greece decision to vote against its creditors requests, analysts at Goldman Sachs see scope for a further widening in peripheral spreads before an agreement is found, or the European Central Bank decides to steps in.

“This is a very different price dynamic as the one seen in 2011-12. Direct financial contagion is now limited, but political and institutional ramifications are harder to predict and price,” says Francesco Garzarelli. Persistent capital controls would put 10-yr Italy and Spain versus Germany in the 200 to 250basis point area, he says.

8:39 am | One idea too far | by Stelios Bouras

Here’s a little more context on Mr. Varoufakis’s departure, from our Athens bureau:

Mr. Varoufakis’s popularity in Greece has deterred Mr. Tsipras from ousting him until now, these people say. But the premier reacted after Mr. Varoufakis told a U.K. newspaper late Sunday that Greece might introduce a parallel currency and electronic IOUs similar to those issued previously in California. Mr. Varoufakis quickly backtracked on his comments to The Daily Telegraph but his prime minister had had enough, say the people familiar with the matter.

A parallel currency and IOUs would put Greece on a slippery slope to exit from the euro, economists and European officials say. It was only the latest of Mr. Varoufakis’s frequent ideas that didn’t have the support of the rest of the Greek government.

8:36 am | The euro's stars are falling | by Phillipa Leighton-Jones

It is, of course, rather tempting to draw parallels between Greece’s shabby euro statue and fears for the future of the eurozone. The famous blue, star-spangled statue, at the center of Frankfurt, the eurozone’s capital, has been facing its own crisis. Vandals have attacked it, some members of the public have suggested it be pulled down, and the ECB — which doesn’t own the statue — doesn’t even have its headquarters nearby any more.

So it’s perhaps fitting that workers have started dismantling stars and the famous blue covering as hopes for a Greek deal crumble. The good news? It’s being repaired, not demolished.

8:17 am | Portuguese stocks are falling | by Patricia Kowsmann

Portuguese stocks extend losses as fears over Greece's fate continue to spook investors, with some euro-zone country leaders making clear that reforms are necessary in exchange for any new aid. Portugal's main opposition leader, Carlos Costa of the Socialist Party, has called for an agreement to keep Greece in the euro, saying it's "of national interest" for Portugal, whose economy is seen as the most fragile after Greece's. Portuguese Prime Minister Pedro Passos Coelho said early Sunday that regardless of the referendum results, creditors lent money expecting to be paid back. Portugal's PSI-20 Index down 3.6%.

8:15 am | To save the banks, someone needs to blink | by Juliet Samuel

Greece's banks can only reopen if there is a "transition currency" away from the euro in place, unless an unlikely deal is struck this evening, according to strategists at Lyxor Asset Management, the French fund manager of €102 billion.

The Greek banking system is in "absolutely critical condition," the strategists say, being entirely reliant on emergency support provided by the European Central Bank. The best-case scenario is that European leaders blink and very quickly allow for a Greek debt restructuring and bank recapitalization. More likely is that there will be no immediate resolution, making Greece's exit from the euro more likely. If ECB support is pulled at some point "this should seal the fate of Greece out of the euro," the strategists says.

8:14 am | A messy accident, says J.P Morgan | by Christopher Whittall

A messy Greek exit from the euro is now more likely than not, according to Stephanie Flanders, chief market strategist for Europe at J.P. Morgan Asset Management.

"We can expect this to cause volatility and sell-offs in European markets and potentially very serious long-term political implications for Europe," she said. "However, assuming that policymakers respond reasonably decisively to signs of contagion, we do not currently believe the result poses a broader risk to European investors or the European recovery," she added.

8:11 am | Moral support from Russia | by James Marson

Russian President Vladimir Putin spoke by telephone with Greek Prime Minister Alexis Tsipras Monday about the result of Sunday’s referendum on the bailout terms of international creditors and the development of Russia-Greece relations, the Kremlin said in a statement.

Earlier Monday, the Kremlin’s spokesman said that Greece hadn’t asked for financial aid from Moscow, according to Russian news agencies.

Mr. Tsipras has visited Moscow twice in recent months, but has received little more than warm public declarations of support. Russia, which is in recession amid Western sanctions and a low oil price, has repeatedly said that Greece has not requested financial aid.

In the statement Monday, the Kremlin said Mr. Putin “expressed support for the people of Greece in overcoming the difficulties facing the country.”

8:10 am | Delusion all around | by Paul Vigna

One reason markets on both sides of the pond aren't tanking worse than they are is that so much has been thrown up in the air in the wake of the Greek vote that it's hard to know for sure where this is headed. Peter Boockvar, a managing director at Virginia's Lindsey Group, says he, too, doesn't know exactly how any of this plays out, but he does know one thing.

"What I do know is that all sides of the negotiations remain delusional."

Here's his unabridged comment:

"The Tsipras government is delusional if they think the Europeans are going to keep shoveling them money without any tough reforms (I don’t believe higher taxes is the answer but right sizing their public sector certainly is). Tsipras himself is delusional if he thinks that the economic policies of North Korea is the best path to follow. The Greek people are delusional if they think they can have a better life as long as the private sector is being milked to fund an overly generous public sector (in other words, the welfare state is officially out of other people’s money). And, The Europeans are delusional if they think they don't have to write off any portion of the 300b+ Euro debt that is owed to them."

8:09 am | U.K. steps up scrutiny of Greek banks in the U.K. | by Jason Douglas and Nicholas Winning

British Prime Minister David Cameron met early Monday with senior officials including Treasury chief George Osborne and Bank of England Governor Mark Carney to assess the fallout from the outcome of Greece’s referendum, including whether any Britons in the country may need assistance.

The U.K. isn’t in the euro and Britain has few direct financial links to Greece, but officials are worried the crisis could once again spread to other indebted nations in the eurozone and hurt the broader European economy. Mr. Osborne is due to make a statement to parliament later Monday with the U.K. government’s latest assessment of the risks and how to mitigate them.

The Treasury has drawn up plans with the U.K. tax authorities to allow British companies facing severe payment delays from Greek customers to delay paying any taxes that may fall due.

And the Bank of England has stepped up its scrutiny of Greek bank branches in the U.K. The BOE said in its twice-yearly Financial Stability Report Wednesday that the outlook for financial stability in the U.K. has deteriorated in recent days as the Greek crisis intensified.

7:51 am | Both in the same boat once | by Paul Hannon

In 2010, Greece and Ireland both had to seek financial help from the European Union and the International Monetary Fund. Today, this is what Ireland’s government is telling people holidaying in Greece: “Our travel advice to Irish people going to Greece-don't change your plans, but bring cash instead of relying on bank cards.”

7:45 am | Here's the finance minister of Finland | by Gabriele Steinhauser

Spent the morning on the phone with colleagues. Off to Brussels for a #Eurogroup meeting tomorrow. Step-by-step. All problems are solvable.

— Alexander Stubb (@alexstubb) July 6, 2015

7:43 am | Germany companies are feeling the pinch | by Nikki Houston

German food and agricultural exporters are feeling the pinch from Greece. Exports down a preliminary 8.2% in the first four months of the year, says Holger Huebner, spokesman for the German Export Association for Food and Agriproducts, or GEFA.

“At the moment, our members are only delivering goods on a pre-paid basis,” he adds. Similar to what companies did after sanctions were imposed on Russia last year, companies are going to other markets to make up the slack. “They are coping by diversifying to other emerging market economies, because room for expansion within Europe is limited,” Mr. Huebner said.

7:27 am | What Greece owes | by Phillipa Leighton-Jones

Greece faces a race to secure financing before a major bond held by the European Central Bank falls due on July 20. Default could worsen Greece’s financial and economic paralysis.

The chart shows the debt due. Here's more on that.

7:21 am | Conditions not right for new bailout talks, Germany says | by Andrea Thomas

Germany sees no reason to immediately restart bailout negotiations after Greeks voted against their international creditors’ conditions for further aid, Chancellor Angela Merkel’s spokesman said Monday, though he left the door open to more talks.

The Greeks’ defiant stance has set up a collision course with the country’s creditors, pushing it closer to bankruptcy and a potential exit from the eurozone. Germany, which has taken the lead in the eurozone push for austerity, is sticking to its stance that Greece must follow tough economic policies.

Ms. Merkel and French President François Hollande are meeting Monday evening to hash out a strategy. For months, France has argued debt relief is necessary to keep Greece in the eurozone, while Germany has insisted Athens must honor its financial commitments.

3:46 am | Irritation | by Stelios Bouras

Here's a quick recap of Yanis Varoufakis's recent history.

Since becoming finance minister with the left-wing Syriza led government at the end of January, Mr. Varoufakis caused great irritation among his colleagues in the eurozone, repeatedly lecturing them on the failure of the region’s economic policies. A reshuffle of Greece’s negotiating team with lenders in April largely sidelined him after he had antagonized peers and was no longer seen as acceptable negotiating partner.

But he remained an influential adviser to Greek Prime Minister Alexis Tsipras and a leading advocate in taking a hard line against creditors in the belief that Germany and others will relent in their austerity demands rather than risk the break up of the euro.

3:38 am | Referendum takes Greece into the unknown | by Stephen Fidler

3:28 am | Here's one prognosis for the ELA | by Emese Bartha

Attention shifts to the European Central Bank which this afternoon is set to discuss what to do with the emergency liquidity assistance to Greece. BNP Paribas’s interest rates team reckons that a status quo is likely, at least until July 20, when Greece has to redeem bonds held by the ECB. “What is sure is that if the ECB decides to stop ELA, Greek banks are dead,” BNP Paribas says.

3:26 am | The Greek situation is now even more dramatic, says German industry chief | by Andrea Thomas

Greeks’ “no” vote to bailout conditions from international creditors is a “slap in the face of all Europeans,” said the president of Germany’s Federation of German Industry.

“The Greek people has maneuvered itself into an extremely difficult situation, the government in Athens is responsible for this,” BDI president Ulrich Grillo told German daily Bild. “The situation is now even more dramatic.”

3:18 am | And there goes the opening bell | by Josie Cox

The Stoxx Europe 600 is down 1.1%, weighed by a 1.5% decline on Germany’s DAX and a 1.6% slide on France’s CAC-40. Spain’s Ibex and Italy’s FTSE MIB are down 1.6% and 2.3% respectively. The euro is off 0.6% against the dollar at $1.104.

2:49 am | Reactions from Paris | by Phillipa Leighton-Jones

Here are flashes from our wire:

DJ French Fin Min: Greek Vote Does Not Immediately Resolve Anything

DJ French Fin Min: Greece is in Very Difficult Crisis That can Get Worse

DJ French Fin Min: Greek Government Must Quickly Make Proposals

DJ French Fin Min: Greek No Vote Does Not Mean Automatic Exit from Euro

DJ French Fin Min: There is Basis for Dialogue With Greece

DJ French Fin Min:No Solution for Greece Without Deep Franco-German Talks

DJ French Fin Min: ECB Will do What is Necessary Independently

DJ French Fin Min: Level of Liquidity for Greek Banks Cannot be Reduced

DJ French Fin Min: Greek Banks Are in Enormous Difficulty

DJ France Wants Greece to Make Proposals so Talks can Restart - Govt Spokesman

2:41 am | What happens next? | by Phillipa Leighton-Jones

Here’s a guide from Citigroup on the big meetings to watch over the next 48 hours:

– Monday morning: Tsipras will hold emergency meeting of Greek party leaders ahead of negotiations, scheduled for 10:00 Athens time (08:00 BST)

– Monday morning: EC President Juncker will hold conference call with Tusk, Dijsselbloem and Draghi (the ‘Euro-Institutionals’).

– Monday: ECB governing council will decide on the ELA, which could provide a glimpse of what the Eurozone officials are contemplating.

– Monday: Eurogroup phone conference, followed by a meeting of the Eurogroup working group of deputy finance ministers.

– Monday evening: Merkel will visit Paris to discuss the Greek referendum with Hollande from 18:30 CEST (17:30 BST).

– Tuesday: Emergency Eurozone leaders’ summit scheduled for 18:00 CEST (17:00 BST)

2:38 am | 'People don't know how to trade Greece' | by Chiara Albanese

Why’s the euro on the way back up?

“Creditors will see it as a concession, and from his letter it seems some sort of deal is near,” says Aurelija Augulyte, analyst at Nordea, adding that panic in markets was overdone last week, and “it seems they have learned.”

Moreover, people don’t know how to trade Greece, she adds. “Everyone realizes that it will likely take some more time. It is difficult to see big changes in trends.” Markets summer mode and lower volumes and volatility typical of the season are adding, she says.

2:36 am | Citi puts all Greek stocks under review | by Josie Cox

“Given the extended closure of the Athens exchange we are putting all Athens quoted stocks Under Review until the market reopens,” strategists at Citigroup write in a note. “This reflects the highly unusual circumstances of this extended suspension. We will issue new ratings and target prices as soon as possible,” they add.

2:35 am | In a way, Greece is already out | by Josie Cox

In one sense, Greece has already left the euro, says Paul Donovan, an economist at UBS. “A euro in a Greek bank is clearly perceived as having less worth than a euro in a Greek person's hands, and as having less worth than a euro in another part of the euro area,” he says.

2:31 am | What the European markets are expected to do today | by Josie Cox

This from our pre-market opener over on WSJ.com:

The euro dropped on Monday and European shares were expected to open sharply lower, a day after Greeks overwhelmingly voted against their international creditors’ conditions for further bailout aid.

The bloc’s single currency fell as low as $1.0952 during Asian trading hours, before recovering slightly to trade around 0.5% lower on the day at $1.105 early in Europe.

Germany’s DAX, France’s CAC-40 and London’s FTSE 100 were all seen opening between 100 and 300 points lower, according to brokers.

BNP Paribas strategists said that there will be “significant uncertainty” over the next 48 hours, which others said would spur demand for assets considered safest during times of stress on Monday, such as German government bonds.

2:28 am | Brace for a surge in volumes | by Chiara Albanese

Trading platforms and exchanges are bracing for higher volumes today. “We are expecting a higher level of activity across markets on Monday as participants react to the news,” says Mark Hemsley, chief executive of BATS Chi-X Europe, the European arm of U.S. exchange BATS Global Market.

As tensions over the ability of the country to repay its debt escalated last week, the exchange reported €63.4billion traded on daily on average in the first part of last week, nearly double last year’s average.

Similarly, interdealer broker ICAP Plc saw an increase in trading volumes in the so-called ‘repo’ market in June, caused by volatility in euro sovereign bond cash markets.

2:26 am

Early bond moves: Portugal/Italy/Spain c. 18bps wider versus Germany in 10s. Not that big a move, in the context.

— Richard Barley (@RichardBarley1) July 6, 2015

2:25 am | Nordea says probability of Grexit now 65% | by Emese Bartha

The probability of a Grexit, or Greece leaving the eurozone, has grown to 65%, even if 81% of Greeks still want to belong to the euro area, according to Nordea economists.

Prior to the referendum they had put the probability of a Grexit at 45%. The bank’s analysts reckon there’s still a chance for a new deal but the negotiations will be “very difficult” in such a case and the outcome will most likely be much harder on Greece, even if the Greek government initially will demand a softer deal. Greece won’t be thrown out of the euro, but will likely drift out via the banking system, according to Nordea’s expectations.

2:09 am | Expect the negotiations to get easier, says Standard Bank | by Emese Bartha

The resignation of Greek Finance Minister Yanis Varoufakis is a “very big news” and a “very positive development,” says Demetrios Efstathiou, strategist at ICBC Standard Bank. The Greek finance minister had lost the trust of his eurozone partners, and negotiations will become “somewhat easier” without him, Mr. Efstathiou says.

2:06 am

2:01 am | The euro is welcoming the Varoufakis news | by Hiroyuki Kachi

The EUR is trimming earlier losses against the USD and the JPY, clawing back most of the lost ground from late Friday after news that Greek Finance Minister Varoufakis has announced his resignation.

"He is out of the negotiations and it seems the market is showing a positive response," says a senior European bank dealer.

The EUR/USD is now at 1.1080 compared with 1.1107 late Friday in New York. The EUR/JPY is now at 135.80 from 136.18 Friday.

2:01 am | 'I shall wear the creditors' loathing with pride' -- Varoufakis | by Phillipa Leighton-Jones

The referendum of 5 July will stay in history as a unique moment when a small European nation rose up against debt-bondage.

1:53 am | Varoufakis on bailout program: 'Damaging, irrational' | by Phillipa Leighton-Jones

We’re waiting for that statement from Mr. Varoufakis, but earlier this morning on his blog, this is how he described Sunday’s No vote:

“On the 25 of January, dignity was restored to the people of Greece.

In the five months that intervened since then, we became the first government that dared raise its voice, speaking on behalf of the people, saying NO to the damaging irrationality of our extend-and-pretend ‘Bailout Program’.”

1:42 am | Finance Minister Resigns

Greek Finance Minister Varoufakis Resigns, Statement Says

1:28 am | Greek Referendum Is Already a Bad Precedent, Citi Says | by Emese Bartha

Long term, Greece’s referendum has already set a bad precedent for any reforms or austerity needed in the next crisis, say Citigroup rates strategists Harvinder Sian and Peter Goves. Moreover, a default inside the eurozone by Greece also sets a bad precedent for political extremes in a number of countries, despite the economic pain, they add. A Grexit would also infer added risk premium for eurozone periphery in the medium term. As for periphery bonds, “we want to buy on weakness,” they write in a note.

10:16 pm | Greece Eurozone Exit a Time Bomb for Peripheral Bond Markets | by James Glynn

Recent volatility in Europe's peripheral bond market shows that developments in Greece can still have major knock-on effects beyond its borders, says Alliance Bernstein in a market note. "If Greece actually leaves the euro area, these knock on effects will intensify. That's because the departure of any country from the euro area would shatter the myth that membership is irrevocable," it says. This would lead to a higher risk premium in other countries, that could rise, "and act as a dangerous accelerant, at times of economic or financial market stress."

9:10 pm | Japan Government Bonds Up After Greek Vote | by Takashi Nakamichi

Investors move into safe-haven securities following the Greek rejection of bailout terms, pushing higher Japanese government bond prices. The benchmark 10-year JGB yield, which moves inversely with prices, is down two and a half basis points at 0.455% as of 0030 GMT, the lowest in four sessions. But the debt market is nowhere near a panic, with investors well-aware that Japan has no close economic or financial ties with Greece. “It will be after the overseas markets react” if and when the JGB market is to make any serious moves, says Bank of America Merrill Lynch bond strategist Shuichi Ohsaki. The 10-year yield may fall further in the coming hours, but its downside below 0.450% will likely be limited, he adds.

9:08 pm | Oil Falls Sharply After Greece Referendum | by Eric Yep

Crude-oil futures are down sharply in early Asian trade Monday on fears of an eventual Greek exit from the eurozone. On Sunday, Greeks overwhelmingly voted against their international creditors’ conditions for further bailout aid. “Following the ‘no’ vote, a deal between Greece and its creditors now looks less likely, especially in the near term,” ABN AMRO says. Meanwhile, Iran says it expects to double its crude exports soon after sanctions are lifted. Saudi Arabia has also lowered the official selling price for most of its benchmark crudes to Asia for August, but raised the price for its customers in Europe. Nymex oil futures are down $1.90 at $55.03/bbl, Brent crude is down 64 cents at $59.68/bbl.

9:03 pm | Mirage of Economic Turnaround Masked New Greek Crisis in the Making | by Charles Forelle

Last year, Greece looked as if it were on the way up. The economy was growing—at one point, faster than Germany’s. International investors jostled to buy the government’s bonds. Banks were rebuilding. Politicians talked about a “clean exit” from Greece’s yearslong bailout: no more loans, no more money, no more humiliating reviews by bureaucrats from Brussels.

For many in Greece, any economic improvement of the past year has been a mirage, even before the financial chaos of recent weeks. Debt burdens have become harder to bear. Wages have tumbled, pushed down by policies intended to make Greek workers more competitive internationally. Social services have been cut to help close the budget gap.

There aren’t yet firm data on voting patterns, but conversations around Athens suggest that the anguish of the many Greeks struggling in a crippled economy animated the resounding no vote. Read more.

8:54 pm | Asian Shares Fall After Greek Vote | by Gregor Stuart hunter

Asian stocks fell early Monday with investors are bracing for a bumpy day of trading, after the Greek referendum Sunday. Creditors have said the outcome imperils future compromise and puts Greece closer to leaving the currency bloc.

“The negative vote was not entirely unexpected, but it sends Greece’s trajectory closer to a eurozone exit, which would be unprecedented,” says Rakuten Securities senior market analyst Masayuki Doshida.

Japan’s Nikkei 225 Stock Average shed 1.3% in early trading while Australia’s S&P/ASX 200 was down 1.6%. South Korea’s Kospi was down 0.9%. Read more.

8:47 pm | Euro Falls as Greeks Reject Bailout Terms | by Hiroyuki Kachi

The euro fell against the dollar and the yen in early Asia trading after Greek voters rejected creditors’ demands in a referendum, raising the likelihood that Greece would exit from the eurozone.

The euro was down about a cent against the dollar compared with Friday’s level. It fell as low as low as $1.0952 in Monday trading in Asia, compared with $1.1107 late Friday in New York. Later Monday morning, it was trading at $1.1023.

The euro was trading at ¥135.15, down from ¥136.18 on Friday.

The “no” vote had the expected result of pushing down the euro against other currencies and hurting stocks, but the initial reaction was relatively modest. Read more

8:31 pm | Japan Tries to Calm Jittery Markets After Greek Referendum | by Takashi Nakamichi

Japan scrambles to calm the jittery markets following the Greek referendum, with Finance Minister Taro Aso and Bank of Japan Gov. Haruhiko Kuroda issuing separate statements emphasizing limited economic ties between the two countries. The government and the BOJ are “fully prepared” to handle possible repercussions, Aso says. The rare move by Aso and Kuroda was made before the opening of the Tokyo share markets, highlighting officials’ concerns over the impact on share prices–long a barometer of success for Prime Minister Shinzo Abe’s growth-revival plan. But whether Japanese officials could prevent fallout from the Greek setback isn’t clear yet, with the Nikkei Stock Average down 1.57% at 20217.78 within a few minutes of the opening.

8:20 pm | EU Week Ahead: Greece to the Fore | by Natalia Drozdiak

Reaction to the outcome of Greece’s referendum over its international bailout plan will likely dominate and could shed further light as to whether Athens could clinch a third bailout from its creditors or whether it may be one step closer to having to exit from the eurozone.

7:55 pm

7:53 pm | What Does Greece's 'No’ Vote Mean for the Fed's Rate Path | by Stephen Grocer

One of the main questions in the wake of the Greek referendum on creditors demands is whether the Fed will still raise interest rates in September.

Last week The WSJ reported that the “wave of financial turbulence overseas could delay the Federal Reserve’s plans to raise short-term interest rates in the months ahead, but only if it ends up knocking the U.S. economy off track.”

“Global growth is really important. We are all connected through the financial markets, through foreign-exchange markets,” Fed governor Jerome Powell said in an interview with The Wall Street Journal two weeks ago. “If global growth weakens, or remains weak, and we get into a trend of that, then yes, that will be a big headwind for the United States economy.”

A number of economists and strategist are out with notes today speculating that Greece’s sharp rejection of the bailout terms increases the likelihood the Fed will push its first rate increase in nine years out beyond September.

The U.S. economics team at BNP Paribas writes:

“The FOMC does not see much harm in waiting a meeting (6 weeks) for the first rate hike and the outcome of the Greek referendum is expected to draw a pragmatic and patient approach from FOMC members…Coming on top of the lackluster payrolls report last week, September looks like too big a stretch. December is not ideal timing as market liquidity will be thin, but waiting until March 2016 is less than ideal also, given the likely sub-5% unemployment rate, higher wages and CPI inflation probably above 2%. If the data and the Fed rhetoric lead to the market fully pricing in a December lift-off, an inaugural hike can be delivered then.”

Michala Marcussen, Societe Generale’s head economist, has a similar view. Despite limited fears of contagion from Greece to other markets including the U.S., she warns of a possible slowdown in the Fed’s rate path due to escalating financial strain in Greece.

Mark Haefele, global chief investment officer for UBS Wealth Management writes:

“We believe the Federal Reserve (Fed) can be relied upon to respond to any global increase in risk aversion. The Fed is likely to be willing to postpone its first rate increase beyond September or even into 2016 if Greek worries prompt a sharp appreciation of the dollar.”

7:49 pm

@charlesforelle Islands that voted YES Spetses Antikythera Agathonisi Kasos Kythnos Fournoi Oinousses Othonoi Ereikousa

— Panagiotis Varlagas (@Varlagas) July 5, 2015

7:48 pm | Residents of Rural Greece Cheer ‘No’ Vote in Referendum | by Matina Stevis

Gathered at small cafes and tavernas, rural voters watched news of the overwhelming rejection of creditors’ proposals in a referendum unfold.

Greece’s rural population was instrumental to the strong message from voters, the breakdown of official results by constituencies suggested.

That is partly because of the rural voters’ distance from the more cosmopolitan capital, and partly because many say they feel they have less to lose from voting against creditors’ prescriptions of more austerity. Read more

7:38 pm | Investors Brace for Big Moves in Wake of Greek Vote | by Tommy Stubbington and Dan Strumpf

Investors are steeling themselves for a rough ride Monday after Greek voters appeared to drive a deeper wedge between the country and its creditors, piling pressure on stocks, bonds of some European countries and the euro.

The common currency tumbled in early Asian trading on Monday after Greece was projected to have voted “no” to creditors’ austerity demands in Sunday’s referendum. U.S. stock futures also fell sharply late Sunday following the Greek vote.

Investors expect a bout of market tumult in the U.S. and Europe following Sunday’s vote. Read more

7:34 pm | U.S. Markets React Poorly to Greeks’ Rejection of Creditors Demands | by Kristen Scholer

U.S. stock futures are sliding with Greek voters set to sharply reject terms to an international bailout Sunday.

Ahead of Monday trade, S&P 500 Futures are down 27 points, or 1.3%, to 2041. With those losses, the S&P 500 is looking to open Monday near a four-month low.

Losses in stock futures suggest traders will be more risk averse during Monday's trading. That could lead to higher bond prices, a rising U.S. dollar and advances in gold.

Of course, the direction of stock futures and the broader market could change overnight as investors digest the news.

7:04 pm | Grexit More Likely Than Not From Here On, Says J.P. Morgan | by James Glynn

J.P. Morgan said in a market note that its base case for the outlook in Greece is that the pressures coming from a dysfunctional banking system across the country will shorten the time horizon to negotiate a deal to a handful of weeks. As that pressure builds, there is likely to be a temptation to call a referendum in Greece on euro membership, and for the state to begin issuing I-O-Us or similar and giving these some status as legal tender. “We would view a Greek exit from the euro as more likely than not,” it adds.

6:57 pm | European Leaders Look to Chart Path Following Greek Vote | by Gabriele Steinhauser and William Horobin

The architects of Greece’s international bailout struggled to respond to what appeared to be a resounding “no” in Sunday’s referendum on the austerity measures they had tied to their aid program.

The result has put the rest of Europe’s currency union in a difficult position: Ahead of the referendum, many politicians warned Greeks that a “no” vote would send their country on its way out of the eurozone. Now they will have to decide whether they are really willing to risk the most tangible result of Europe’s postwar unity and integration.

German Chancellor Angela Merkel and French President François Hollande called for eurozone leaders to hold a summit on Tuesday, Ms. Merkel spokesman Steffen Seibert said after the two leaders spoke by phone Sunday evening. “Both agree that the vote of the Greek citizens is to be respected.”

European Council President Donald Tusk, who presides over meetings between eurozone leaders, confirmed that eurozone leaders would meet in Brussels Tuesday evening. Read more.

6:50 pm | Greek Premier Wins, but Still Faces Difficult Tasks | by Viktoria Dendrinou

Greece’s overwhelming rejection of creditors’ demands is a big win for Alexis Tsipras, but the young premier is still faced with a difficult task: securing Greece’s place in the euro, and striking a financing deal that avoids harsh austerity.

That combination could prove impossible, given the staunch opposition of German-led creditor countries to financing a Greece that rejects a far-reaching, market-oriented overhaul of its economy.

If the coming collision between Mr. Tsipras and his lenders leads to Greek debt default, bank failures and euro exit, Sunday’s adulation could soon turn to fury, analysts say. Read more

6:45 pm

Hours after Greece emphatically rejected its creditors' bailout terms, one of its biggest-the IMF-remains silent. pic.twitter.com/dLSjjofesX

— Ian Talley (@IanTalley) July 5, 2015

6:43 pm | Odds On Fed Rise In September to Be Sharply Trimmed on Greece | by James Glynn

With uncertainty over Greece's future in the eurozone set to be amplified in coming days, odds on a September interest rate tightening by the U.S. Federal Reserve are likely to be heavily trimmed, says Westpac's currency strategy group. Still, its adds that risk aversion should nevertheless give the U.S. dollar a strong tone to start the week. At a minimum, Westpac says it would expect the euro to trade to and possibly below 1.08 (now 1.10). Westpac says it would not be surprised to see a retest towards the lows seen in March and April around 1.05.

6:38 pm | Gold Rising in Asia on Emerging 'No' Vote in Greece | by Rhiannon Hoyle

Gold is rising early in Asia after a projected victory for the "no" vote in Greece, suggesting there's still some appetite among investors for the precious metal as a haven in turbulent times. The commodity had failed to take much of a lift from the escalating crisis in recent weeks, but trades up 0.5% at US$1,173.93/oz as investors worry Greece is on a collision course with the rest of the eurozone. Spot silver is up 0.4% at US$15.742/oz, while precious metals platinum and palladium--used more in industrial applications--both trade lower.

6:38 pm

Greece's imminent death trap: how can it pay ECB on July 20? http://t.co/367fgpRyIl @charlesforelle via @WSJ

— Marcus Walker (@MMQWalker) July 5, 2015

6:17 pm | Emerging ‘No’ Vote in Greece Poses Merkel’s Biggest Challenge | by Bertrand Benoit

The resounding “no” vote in Greece presents German Chancellor Angela Merkel with her toughest challenge since the eurozone crisis broke out five years ago.

Her choice is now between yielding to Greek Premier Alexis Tsipras and sweetening the bailout terms for his country, or sticking to her hard line—and her own voters’ sentiment—in refusing any further concession.

Both avenues are fraught with risks: Watering down the Greek bailout could spark a political rebellion at home and dilute the strict rules the eurozone has assembled in the past five years to ward off future crises.Refusing to bend could see Greece exit from the euro and unleash economic and political chaos in the country. Read more

6:01 pm | Greece Closer To Exiting Eurozone; Uncertainty Is King

A 'no' outcome in the Greek referendum certainly increases the risk of the country exiting the euro, says Elsa Lignos, head of North American G10 FX strategy at RBC Capital Markets. This is particularly the case if the Greek government believes that it will have substantially more bargaining power with the institutions and brings more so-called red lines to the negotiating table. Still, "We nevertheless continue to argue that a 'no' vote does not equate to euro exit in itself. Greeks still overwhelmingly support euro membership," she adds. Polls last week showed support for the euro was actually rising since the referendum was called (75-80%).

5:57 pm | Greek Voters Poll-Ax Markets | by Richard Barkey

The people of Greece have spoken. Official projections show that they have given Prime Minister Alexis Tsipras a big vote of support, entrenching a standoff with Europe and raising the risk of a euro exit. Markets will be jolted anew.

With two-thirds of votes counted, the “no” vote looked set to top 61%. That would signal a rejection of more tax rises and spending cuts. Greece’s spell in euro limbo—deeply damaging to the economy—looks set to continue.

Markets have so far taken the Greek situation largely in stride, but the no vote is a bad outcome for investors. They may have been too eager to embrace a cozy scenario in which a “yes” vote led to political change in Athens. Stocks and southern European government bonds will take a hit; German bunds and U.S. Treasurys will rally. Read more

5:47 pm | Video: Greek Referendum: ‘No’ Vote Predicted to Win

An official projection of Greece’s referendum outcome, based on partial counting, said that at least 61% of Greeks voted “no” to creditors’ demands.

5:37 pm | Referendum Result Takes Greece, and Eurozone, Into the Unknown | by Stephen Fidler

The only certainty now is uncertainty.

However Greeks had voted Sunday would have heralded a period of turmoil. But with a projected victory for the “no” vote, Greece and the eurozone are taking a leap into the unknown.

Carmen Reinhart, professor of international finance at Harvard University’s Kennedy School of Government, said her baseline expectation with a “no” result was that Greece would, sooner or later, leave the euro. “You are really marching toward a Grexit,” she said.

Whether or not that happens, many Greeks and others will assume that it will. That means that, amid the uncertainty, some predictions are a sure thing. Read More

5:24 pm | Referendum Result is Not Aimed at Rupture with Europe, But to Reach Deal, Tsipras Says | by Stelios Bouras

Greece’s Prime Minister Alexis Tsipras said the country’s top priority will be to get banks operating again and restore economic stability after Greeks in a referendum Sunday rejected bailout terms demanded by international creditors.

“I am fully aware that the order that I was given is not for a rupture with Europe but a mandate boosting our negotiating strength to reach a sustainable deal. We all know that there are no easy solutions. But there are fair solutions. There are sustainable solutions,” he said in a televised message.

“As of tomorrow, Greece will sit at the negotiating table. Our immediate priority is to restore the operations of banks and economic stability. Today, we celebrate the winning of democracy. As of tomorrow, all together, we must continue and complete the national effort to reach a deal.”

Mr. Tsipras said he will contact the country’s president later Sunday evening and ask to him to call a meeting Monday with the heads of the country’s political leaders to inform them of initiatives the country will take and listen to their views.

5:17 pm | Euro Tumbles in Asia | by Rebecca Howard

The euro took an early morning tumble in Asia and traders are gearing up for more volatility after a first official projection of Greece’s referendum outcome, based on early counting, indicated at least 61% of Greeks voted “no” to creditors’ demands.

The euro fell as low as $1.0979 against the dollar and is currently trading at $1.1015. The safe-haven Japanese yen benefited from the turmoil, with the euro falling to Yen133.76 and the U.S. dollar falling to Yen121.71.

Markets are skittish as the result “sharply raises the prospect of an eventual Greek exit from the eurozone,” said BNZ FX Strategist Raiko Shareef. “Clearly, European leaders will not take this lightly.” Read more

5:08 pm | German Vice Chancellor Skeptical Greece Can Reach Deal With Creditors | by Andrea Thomas

German Vice Chancellor Sigmar Gabriel said he is skeptical that Greece will be able to reach a deal with its international creditors to secure much-needed fresh aid.

Mr. Tsipras has "destroyed the last bridges across which Europe and Greece could have moved towards a compromise," Mr. Gabriel was quoted as saying in an interview in German daily Tagesspiegel's Monday edition.

"By rejecting the rules of the eurozone...negotiations over multi-billion (aid) programs are difficult to picture," he said. "Tsipras and his government are leading the Greek people onto a path of bitter sacrifice and hopelessness."

4:52 pm | European Parliament President Urges Talks Soon on Aid for Greece | by Andrea Thomas

Talks about humanitarian aid for Greece must start as early as Monday or Tuesday, the president of the European Parliament said Sunday, after official projections suggest Greek voters rejected international lenders' bailout terms in a referendum.

"I think we need to pursue every effort to stay together" as the eurozone, said Martin Schulz on German public broadcaster ARD. "Therefore, I believe we must talk about humanitarian aid already tomorrow or the day after."

Last week, Greece defaulted on the International Monetary Fund and its previous bailout program from international lenders expired June 30.

Mr. Schulz said that Greek Prime Minister Alexis Tsipras, who had campaigned for Greece's citizens to reject lenders' demands for economic overhauls and fiscal measures in a referendum Sunday, has been backed at home but he has now more limitations in his negotiations with eurozone partners for financial help.

"I really wait for the government in Athens to make proposals that the other democracies in Europe can also live with," Mr. Schulz said.

"We need a humanitarian aid program so that the poorest of the poor don't have to pay for the fanaticism that has been seen on all levels in Europe over the past months," he said.

4:50 pm | Italy's Grillo Welcomes Outcome of Greek Referendum | by Giovanni Legorano

Former comedian Beppe Grillo of Italy’s antiestablishment 5 Star Movement welcomed the outcome of the Greek referendum, calling it an extraordinary result.

“This is direct democracy and we share these [political] tools,” Mr.Grillo said in an interview broadcast by Italian TV channel La 7.

Mr. Grillo and his party have sent Parliament a petition with 200,000 signatures calling for a referendum by next January on whether Italians want to remain in the eurozone.

“Since Italians weren’t asked if they wanted to be part of the eurozone, they will be able to have their say,” Mr. Grillo said in Athens, where he went to follow the results of the referendum.

4:34 pm | Merkel, Hollande Call for Eurozone Summit on Tuesday | by Anton Troianovski

German Chancellor Angela Merkel and French President Francois Hollande called for a eurozone leaders' summit on Tuesday, Ms. Merkel's spokesman said.

The spokesman, Steffen Seibert, said the two spoke on the phone Sunday evening.

"Both agree that the vote of the Greek citizens is to be respected," Mr. Seibert said in a statement.

4:33 pm | Former Prime Minister Samaras to Step Down as Head of Conservative New Democracy Party | by Stelios Bouras

Former Greek Prime Minister Antonis Samaras said Sunday that we will step down as head of the country's main conservative opposition party New Democracy.

Mr. Samaras was one of the figures backing the yes vote in Sunday's referendum in which a clear majority of Greeks looked set to reject bailout terms demanded by international creditors in exchange for further aid, backing the no vote.

4:31 pm | Italy's Economy Minister: ‘Shared Rules by the European People Are Needed’ | by Giovanni Legorano

Italy’s Economy Minister Pier Carlo Padoan said Sunday evening that reforms and investments are the key to achieve sustainable economic growth in any country, while projections show the Greeks rejected in a referendum the country’s creditors demands.

In three different tweets, Mr. Padoan also said that “shared rules by the European people are needed to guarantee the same objective: welfare [obtained] with economic growth and employment.”

Mr Padoan added that Italy has always worked for solidarity and more integration in Europe. “It was true yesterday and it will still be true tomorrow,” he wrote.

4:12 pm | 'No' Supporters Fill Syntagma Square | by Nektaria Stamouli and Viktoria Dendrinou

Hundreds of Greeks started gathering in front of the Parliament late Sunday to celebrate the ‘no’ vote in the country’s referendum.

As soon as results started trickling in, the main Syntagma Square filled up with Greeks of all ages. The group included union representatives, ministers and MPs from the ruling Syriza party.

“No, no, no” they chanted, waving Greek and Syriza flags.

Varvara Papadimitriou, a 46-year-old mother of five, said she was not afraid of what comes next.

“It cannot get any worse than it is right now. Regardless of what happens I feel pride and dignity. ”

“Tsipras is the best,” she added, echoing the feeling of many in Athens’s main square who were shouting slogans supporting the country’s prime minister.

“I thought a lot about leaving the country if ‘yes’ won,” said Maria Athanasaki, a 34-year-old French teacher.

“I feel very proud of the Greek people, who were not afraid and didn’t turn their backs,” she said. “A better deal is necessary – the other European people will demand it,” she added.

3:41 pm | Investors Brace for Big Moves in Wake of Greek Vote | by Tommy Stubbington and Chiara Albanese

Investors in European stocks and bonds are gearing up for some big market moves, whatever the outcome of Greece's referendum.

A first official projection of the referendum outcome, based on early counting, said that at least 61% of Greeks voted "no" to the demands of the country's international creditors.

With further political wrangling likely to follow the referendum and Greece's future in the eurozone hanging in the balance, "volatility will no doubt last for a while," said Giordano Lombardo, chief investment officer at Pioneer Investments, ahead of this weekend's vote.

Pioneer, which manages EUR226.3 billion ($251.4 billion) of assets, has cut back holdings of Spanish and Italian bonds and stocks to protect its portfolios from any potential selloff after the Greek vote. Assets in those highly indebted countries have been vulnerable in the past to fears that a Greek departure from the eurozone could foreshadow a wider splintering of the currency bloc.

Prime Minister Alexis Tsipras has said a "no" vote would force Greece's creditors to compromise. But the creditors, and opposition parties in Greece, have said a rejection of the bailout terms would severely harm the chance of a deal, leaving the country on the brink of an exit from the currency bloc.

That would provoke some heavy stock declines on Monday, investors and analysts said.

"The majority of our clients went into the weekend expecting a 'yes' result," Francesco Garzarelli, co-head of markets research at Goldman Sachs, wrote in a note to clients shortly before polls closed Sunday.

He expects a definitive "no" outcome to increase the likelihood of Greece's exit from the eurozone. Strategists at the bank have previously estimated the Euro Stoxx 50 index of blue-chip eurozone companies could fall by as much as 10% after a "no" vote.

Investors "are prepared for redemptions and have cash on the sidelines, yet few are really prepared for a 'no' in my view," said Alberto Gallo, head of macro credit strategy at RBS, after polls closed...

(Read More...)

3:33 pm | Greeks Await Uncertain Future After Referendum | by WSJ Staff

Greeks are preparing for an uncertain future after voting in a referendum on whether it should accept the demands of the country’s international creditors. Mark Kelly hears what Greeks think the future holds.

3:31 pm | Spain's Podemos congratulates Greek government | by David Roman

Early Sunday, a few hundred Podemos supporters rallied in Madrid promoting a "No" vote in Greece, the latest of several relatively small such protests in the country in recent days. As results showed the "No" camp in the lead, several Podemos leaders used Twitter to congratulate the Greek government.

Pablo Iglesias, Podemos' leader, wrote, "Today democracy has won in Greece." Pablo Echenique, head of the party in the northern region of Aragon, wrote that "Our Greek brothers just told the financial dictators that democracy and dignity are not to be tampered with."

According to an opinion poll published Saturday by Spain's largest paper, El Pais, Podemos would come third in a general election with 21.5% of the vote, closely behind the Socialist Party with 22.5% and the ruling conservative Popular Party with 23%--a result that could lead to a Socialists-Podemos coalition. Spain's general election is due later this year.

3:28 pm | 'A Great Act of Courage' | by Giada Zampano

"The Greek vote was a great act of courage," said Matteo Salvini, leader of the anti-EU and anti-euro Northern League. "After this, Europe should just wake up and change all its wrong rules," he said in a phone interview with the Wall Street Journal.

Mr. Salvini said that the Italian government should learn from Greece and the outcome of the Greek referendum.

"The Greek choice was clear. Since we don't have a similar tool, and we're not allowed to call a referendum on the euro and EU rules, now the Italian government should start saying some 'NOs in Europe,' like the Greek citizens did," he added. "For instance, I would start with not applying the crazy rules of the Stability Pact."

"If this doesn't happen, it will be open war. And Italy should start thinking about going on its own way," he added, suggesting that Rome should evaluate the possibility of leaving the euro.

3:19 pm | Estonian Prime Minister: Greek Referendum Outcome ‘Does Not Look Good for the Future of Greek People | by Gabriele Steinhauser

The apparent “no” vote in Greece’s referendum on its international bailout “does not look good for the future of Greek people,” Estonia’s Prime Minister Taavi Roivas said in a message from his official twitter account.

The tweet, which was accompanied by a picture showing what appeared to be a Greek television studio and preliminary results from Sunday’s vote, was one of the first official reactions from a eurozone leader.

Shortly after, Mr. Roivas also retweeted a message from former Swedish Foreign Minister Carl Bildt. “Well, a clear majority in Greece doesn’t want the help that other Euro countries have offered. Their choice. But tragic,” that message read.

Does not look good for the future of Greek people... #greferendum #Greece pic.twitter.com/mtOlzJloWg

— Taavi Rõivas (@TaaviRoivas) July 5, 2015

Well, a clear majority in Greece doesn't want the help that other Euro countries have offered. Their choice. But tragic.

— Carl Bildt (@carlbildt) July 5, 2015

3:17 pm | Euro falls against dollar after Greek vote | by Rebecca Howard

EUR/USD tumbles on early morning jitters after Greeks voted on a referendum on whether to accept creditors' demands. The first official projection of the outcome, based on early counting, said that at least 61% of Greeks voted "no" to creditors' demands, an outcome that—if confirmed—would set the country on a collision course with the rest of the eurozone. The pair is at 1.0987 early in New Zealand versus 1.1108 ahead of the open.

3:14 pm | 'No' vote leads with 50.5% of votes counted

*61.2% Vote No in Greek Referendum, 38.8% Vote Yes, With 50.5% of Total Votes Counted

3:13 pm | Germany's Left Party: No to Merkel's 'Poisonous Policy' | by Andrea Thomas

Germany’s anticapitalist Left party says a “no” in the Greek bailout referendum is a “no” to German Chancellor Angela Merkel’s “poisonous policy.” The comments by the party’s co-chairman Bernd Riexinger come as a first official projection of Greece’s referendum sees a majority of Greek voters rejecting creditors’ demands. The Greeks voted against a "disastrous policy of social cuts and economic devastation,“ he said. The Left party is the biggest opposition party in Germany’s lower house of parliament and an ally of Greek President Alexis Tsipras in Germany. Mr. Riexinger says there is no doubt that Greece will remain a member of the eurozone.

2:49 pm | A 'No' vote would make more aid to Greece 'difficult,' German MP says | by Andrea Thomas

A “no” vote in the Greek referendum on bailout conditions would make it hard for the German parliament to give the necessary backing for more financial help to cash-strapped Greece, an ally with German Chancellor Angela Merkel says Sunday. “For us, it was always the case and it remains so: help in exchange for reforms. If the Greek government doesn’t deliver these reforms and gets a backing from its people for this then it will actually be difficult to give a go-ahead for additional aid packages,” says Ralph Brinkhaus, deputy parliamentary floor leader with Ms. Merkel’s conservative parties. He also says a debt cut is not an issue for him but the aim should be to get the Greek economy back on its footing. For this, reforms are needed, he said on German public broadcaster ZDF.

2:30 pm | Ireland's Sinn Fein welcomes 'No' vote | by Paul Hannon

Ireland's left-of-center Sinn Fein party, which has opposed austerity at home, was one of the first in Europe to welcome early indications that Greeks had voted "no" in the referendum. In a statement, the party's economics spokesman called on the rest of the eurozone to resume negotiations on a fresh bailout that includes debt relief.

“I want to congratulate the people of Greece," said Pearse Doherty, an Irish lawmaker, who was in Athens for the vote. "This is is a resounding vote against austerity and the failure of the Troika to reach a just compromise. Years of brutal austerity have taken their toll on the Greek people who have stood up to the bullyboys of the EU today."

Mr. Doherty accused the Irish government and its counterparts in other eurozone countries of "scaremongering" ahead of the vote. Ireland faces general elections by April of next year at the latest, and opinion polls indicate Sinn Fein is the second most popular party, behind the ruling Fine Gael. Ireland was the second eurozone member after Greece to require a bailout in 2010, but completed its three-year program in 2013 and last year had the fastest growing economy in Europe.

2:24 pm | Video: Opinion polls predict 'No' win in Greece

2:22 pm | First official projection says 61% of Greeks Voted 'No' | by Nektaria Stamouli and Stelios Bouras

A first official projection of Greece’s referendum outcome, based on early counting, said that at least 61% of Greeks voted “no” to creditors’ demands on Sunday, an outcome that—if confirmed—would set the country on a collision course with the rest of the eurozone.

The projection, announced by the company Singular Logic, the official partner of Greece’s interior ministry in carrying out the referendum, was announced after some 20% of the vote had been counted.

“The estimate from Singular Logic is that the result in favor of ‘no’ will exceed 61%,” a spokesman for the organizing company said.

The official projection, if confirmed when all votes are counted, points to a heavier-than-expected victory for the “no” campaign against the austerity policies demanded by Greece’s creditors: the rest of the eurozone and the International Monetary Fund.

Four opinion polls conducted during Sunday by private broadcasters had pointed to a narrow majority for the “no” camp.

2:11 pm | 'No' vote supporters in Athens square

1:52 pm | German foreign minister warns of 'Grexit' consequences | by Emese Bartha

German Foreign Minister Frank-Walter Steinmeier warns of the consequences of a Greek exit from the eurozone for the European Union, in an interview with Tagesspiegel am Sonntag.

“Even if we can cope with such a development with budgetary and monetary policies, the signal of a ‘Grexit’ to countries outside the EU would be devastating,” Mr. Steinmeier is quoted as saying.

1:36 pm | An Endgame Timetable

Greece's final deadline: July 20, the day it must repay a bond to @ecb. An endgame timetable: http://t.co/UbuTqepD3x pic.twitter.com/fNQCA6KMUn

— Sudeep Reddy (@Reddy) July 5, 2015

1:34 pm | Euro Limbo

Whether NO or YES finally wins, if the final result is as close as polls suggest, uncertainty rules, and Greece stays in euro limbo

— Richard Barley (@RichardBarley1) July 5, 2015

1:19 pm | Opinion Polls Suggest More Greeks Would Vote 'No' | by Stelios Bouras And Nektaria Stamouli

Four opinion polls conducted during Sunday's bailout referendum suggested more Greeks would vote "no" than "yes" to the demands of the country's international lenders, an outcome that would set the country on a collision course with the rest of the eurozone.

The referendum result could differ from the opinion polls, which were conducted by telephone on behalf of Greek TV stations. No surveys of voter behavior were conducted at polling stations. The opinion polls suggest the referendum race is close.

If the opinion polls are correct in pointing to a majority for "no," it would be a victory for Greek Prime Minister Alexis Tsipras, who called vehemently on Greeks to reject lenders' terms for bailout.

But Mr. Tsipras might soon find it difficult to deliver on his promise to secure a more lenient bailout deal from Europe, where other governments, led by Germany, are in no mood to offer Greece more generous terms.

An opinion poll for Greek broadcaster Mega put the "no" vote at about 51.5%, ahead of "yes" votes at 48.5%. The margin of statistical error on the survey was two percentage points, the broadcaster said.

Another broadcaster, Antenna, released an opinion poll that put the "no" vote at 52% and the "yes" vote at 48%. The broadcaster didn't immediately give a margin of error.

A third poll for broadcaster Alpha put support for "no" in a range from 49.5% to 54.5%, and the "yes" vote in a range from 45.5% to 50.5%. And broadcaster Star's poll put "no" in a range from 49% to 54%, and "yes" in a range from 46% to 51%.

Full statistical details for the five surveys were not immediately available. In the absence of exit polls, Greek media organizations relied on telephone surveys. The fact that all five opinion polls point in the same direction increases the chance that the polls' outcome is not due to statistical error.

(Read more...)

1:15 pm | Germany’s Schneider: Negotiations will be ‘extremely difficult’ | by Andrea Thomas

It will be “extremely difficult” to negotiate with Greece’s left-wing government if the outcome of the Greek referendum confirms the narrow victory for “no” supporters that opinion polls are predicting, said Carsten Schneider, deputy parliamentary floor leader of Germany’s ruling Social Democrats, on German broadcaster ARD. The Greek government has thrown sand into the eyes of Greeks about the chances to renegotiate a bailout with international lenders, he warned.

1:00 pm | Europe Should Focus More on Structural Reforms | by Emese Bartha

Europe should use the current economic situation to carry out reforms, said UBS Chairman Axel Weber in a preview of an interview to be published by Handelsblatt on Monday.

Mr. Weber, formerly president of the Bundesbank, recommends that the reforms should focus on the labor market, tax system, social benefits and education, adding that "the structural problems in Europe can't be solved with monetary policy."

Mr. Weber said there is too much talk about debt reduction and central banks' monetary-policy measures and too little about structural reforms.

"I was and I'm of the view that the European Central Bank as central bank isn't in the situation to solve these problems alone and they are also not its tasks," Mr. Weber said.

12:44 pm | Polls Close in Greek Referendum | by Stelios Bouras And Nektaria Stamouli

Voting ended in Greece’s referendum Sunday, with several opinion polls taken during the day predicting a narrow victory for the “no” side.

The referendum has laid bare stark divisions about the struggling country’s future in the Eurozone, as voters weighed in on whether to accept lenders’ demands for far-reaching economic overhauls. No exit polls were taken in the Greek vote, and the result is expected to be close.

The referendum appears to have split Greece along lines of age, affluence and ideology. The young, many pensioners, the poor and those with pronounced left-wing or nationalist right-wing views are leaning toward a “no.” Middle-class, middle-aged and politically centrist voters are more likely to vote “yes” to protect Greece’s place in the eurozone.

Greek Prime Minister Alexis Tsipras has argued that a vote against the creditors will strengthen his hand in negotiations, while some eurozone leaders have warned it would be a vote to leave the euro.

Even if Greeks side with creditors, Germany has warned, talks will still be drawn-out and painful, and there is little guarantee that a bailout deal can be reached in time to save the banking system from insolvency within weeks. Banks have been shut for a week, with daily ATM withdrawals severely restricted.

“Any person who is able to think for themselves will vote ‘no.’ I did,” said Anna Stavrouli, a 46-year-old public-sector employee after casting her vote in the working-class Athens neighborhood of Dafni. “It is time to stand up and defend ourselves.”

“My vote was a loud ‘yes,’” said 33-year-old graphic designer Georgia Hatzisava. “I have worked hard to build up a business and now it could collapse.”

(Click here to read full story)

12:39 pm | Counting the Votes | by WSJ Staff

12:27 pm | France's Hollande, Germany's Merkel to Meet in Paris on Monday to Discuss Greece | by Anton Troianovski and William Horobin

German Chancellor Angela Merkel will fly to Paris Monday for talks on Greece with French President Francois Hollande, her spokesman said after polls closed in Greece.

Ms. Merkel will meet with and have dinner with Mr. Hollande to discuss “the joint evaluation the situation after the Greek referendum and the continuation of close German-French cooperation on this issue,” Ms. Merkel’s spokesman said.

“This meeting is part of the framework of cooperation between France and Germany to contribute to a long-lasting solution for Greece,” Mr. Hollande’s office said in a statement.

Speaking earlier, France’s economy minister Emmanuel Macron said Ms. Merkel is under greater pressure in Germany than Mr. Hollande is in France to take a firm line on Greece. But finding a compromise will be essential for the future of the eurozone, he said.

“We will find the short-term solution for Greece and the medium-term solution for the eurozone in our capacity to forge a strong Franco-German compromise,” Mr Macron said at an economic conference in Aix-en-Provence in southern France.

12:14 pm | Voting ends

*Voting in Greek Referendum Ends

*Some Opinion Polls Taken During Day of Vote Predict Narrow Victory for 'No'

*Sample Size, Margin of Error Not Immediately Clear

*No Exit Polls Taken at Voting Places; Result Expected to be Close

12:11 pm | Photos: Greek Voters Head to Polls | by Stephen Grocer

Check out a slideshow of Greek voters heading to the polls:

11:37 am | No respect for seniors

Given the heart-wrenching photos of Greek pensioners, it's pretty clear seniority was already not respected. https://t.co/3E6Lk1K62y

— Pedro da Costa (@pdacosta) July 5, 2015

11:34 am | On the street in Athens | by Nektaria Stamouli

In central Athens area of Pagkrati, Greeks continue to head to polls to cast their vote in an outcome that could determine the country’s position in the European currency.

Despoina Fermeli, 50, who has been unemployed for more than a year, arrives at the polling center with her husband and her teenage daughter all certain for their "no" vote.

"We will say a crystal clear ‘no’, because we don't want any more bailout programs, we have had enough of bosses from outside; we want to be the boss of our own country."

Mrs. Fermeli says she is not afraid that Greece will leave the euro, "the creditors should be more afraid than us."

But Maria Papandreou, a 70-year-old pensioner, has a totally different view.

“I will support "yes" so that our country is not destroyed," Mrs Papandreou says with tears in her eyes. "If ‘no’ prevails there is no tomorrow for the country."

11:31 am | Belgium minister: Talks with Greece could continue after 'No' vote | by William Horobin

Belgian Foreign Affairs Minister Didier Reynders said Sunday that if Greek people vote no in the referendum, talks with European partners could continue but Greek Prime Minister Alexis Tsipras would be in a weakened negotiating position.

Mr. Reynders said that a no vote would entail starting from scratch to find a new plan to save the country and keep it in the eurozone. As the loans to Greece are mainly from European citizens, it would be difficult to make greater concessions he said, noting that the retirement age is higher in Belgium than Greece.

"The Greek prime minister says he'll be stronger. But democracy is in the whole of Europe, it's not just Greek democracy," Mr. Reynders said. "Fortunately we're not doing referendums in other countries to ask if we should help Greece because I think there would be some surprises," he added.

Mr. Reynders also said a no vote would have a prolonged negative impact on Greece's own economy.

"The shock will go on for longer than the Greek government is claiming. If it's yes, we'll have a basis and can work on that basis. If it's no we'll need to renegotiate a new plan, with all the risks that involves," Mr. Reynders said.

The Belgian foreign minister, who is also deputy prime minister, said that a no vote would force the eurozone to prepare measures to maintain confidence in other eurozone countries.

The wider European economy would also be at risk, he said.

"For the moment, the European economy is recovering slightly, but recovering nonetheless. It could create a further delay and put the brakes on," Mr. Reynders said.

11:16 am | What happens if Greece leaves the eurozone?

11:13 am | All eyes on Greece

11:11 am | On the street in Thessaloniki, Greece | by Georgi Kantchev

In Thessaloniki, Greece's second-biggest city, only posters for the "no" campaign could be seen around the city center and near polling stations.

Leaving a polling booth in a school near the central train station, Vassilis Zagondis, an international relations student from Thessaloniki, said he voted "no" because the austerity imposed by Greece's European creditors has been tried for the past five years and didn't work.

"From the moment we started trusting the Europeans, things got progressively worse," he said. "I hope a compromise can be reached in the next few days. But I want a 50-50 compromise. So far, we've covered 90% of the distance and the Europeans called it a compromise."

Meanwhile, veterinarian Athina Konduri said she voted "yes" because she wanted to stay in Europe.

“If ‘no’ wins I am afraid the crisis will deepen. We will go back to the drachma and that is a very bad idea.”

Thanos Logothetis, a street artist, who sells painted pebble stones next to the city' iconic medieval White Tower for 1 euro the piece, said he won't vote at the referendum.

"There is no difference between the Yes and the No. No government can solve out problems," he said. "Whether I sell my pebble stones for euros or drachmas, I will be poor either way."

10:56 am | At the Greek polls

10:27 am | Traders and analysts head to work to deal with fallout | by Giles Turner

While Greek voters have been marching to the polls for a number of hours, traders, analysts and strategists at investment banks are now heading for their terminals to prepare for the expected market volatility, whatever the outcome.

At U.K. bank Barclays, macro sales and trading teams will be present in the London, Singapore, Tokyo and New York offices starting from 5 p.m. U.K. time on Sunday afternoon “to follow the developing situation and to give clients the opportunity to manage their risks,” according to a spokesman.

Rival banks have similar plans in preparation for Asian markets opening early Monday morning. Deutsche Bank has pulled together a task force focusing on the Greek election, and Morgan Stanley also has analysts and strategists in the office Sunday to monitor the Greek outcome, according to staff at the bank.

Not everyone is at their desk on Sunday. Swiss banks Credit Suisse and UBS have told staff to monitor the situation from home.

10:22 am | Greek finance minister casts his vote

10:19 am | 'It will take time to gain clarity' | by Josie Cox

Whatever happens in the Greek vote Sunday, there are some things that will stay the same for the beleaguered Hellenic Republic, at least in the short-term, says Michala Marcussen, an economist at Societe Generale. "Yes or No— it will take time to gain clarity on the situation," she writes in a note. She adds that "much political damage has already been done in the euro area" and that whatever happens, the euro area "needs urgently to accelerate structural reform," both at a national and at a European level.

10:08 am | What would the eurozone be like without Greece?

What would the eurozone look like without Greece? http://t.co/KzDF4f9RaM pic.twitter.com/QTC7jyASU4 #greferendum

— Chiara Albanese (@chiaraalbanese) July 5, 2015

10:05 am | Greeks cast their votes

9:35 am | French economy minister: Even if Greeks vote not, must still seek compromise | by William Horobin

French Economy Minister Emmanuel Macron on Sunday slammed antagonism between opposing sides in Europe over the Greek referendum and said that political talks between Greece and European partners must restart Monday, whatever the result of the vote.

“Even if the Greeks vote no, our responsibility tomorrow will be to not do a Versailles Treaty for the eurozone,” Mr. Macron said, referring to the treaty at the end of World War One that imposed heavy sanctions on Germany. “It’s not because one side thinks they’ve won a referendum that we can crush a people,” Mr. Macron added.

Speaking at the Rencontres Econmiques conference, Mr. Macron criticized those pushing for the country to exit the eurozone, and the Greek government for setting a referendum on texts that he said are no longer valid.

“These are two forms of populism to which we must not give in,” Mr. Macon said.

9:27 am | 'Yes' vote not necessarily best outcome for markets | by Chiara Albanese

A ‘yes’, by Greece on a referendum to weigh in on whether to accept the demands of the country’s lenders, is “not necessarily” the best outcome for markets, says Amundi’s chief economist.

“With a Yes vote, Tsipras may step down … we would enter a political vacuum phase and in the awaiting for new elections or for a large coalition government, the interim situation might be chaotic for negotiations and agreements,” says Philippe Ithurbide, at the firm, which has about $1 trillion of assets under management.

To determine Greece future in the European monetary union, he adds, a ‘yes’ or a ‘no’ is not necessarily what matters the most. “Whatever the answer, negotiations will resurface,” he says.

9:25 am | 'Yes' or 'no,' the Greek government seen falling within weeks | by Emese Bartha

Whatever the outcome of the Greek referendum is, the Greek government will fall in the coming weeks, says UniCredit’s global chief economist Erik Nielsen, and nobody credible will be in charge to deal with the absolutely critical payments falling due on July 20. “History tells you that fragile coalition governments do not last long in rapidly shrinking economies,” he says, adding that there is no plausible scenario which will stabilize the Greek economy in the short term.

9:15 am

Athens cab driver: "On Monday I'd have voted Oxi (No). Today I'm voting Nai (Yes). Why? I want a holiday & bank has my money." #Greferendum

— Mark Kelly (@movingpictureTV) July 5, 2015

9:05 am | Outlook for Greece uncertain even after vote | by Nektaria Stamouli

What happens on Monday in Greece will be just as unpredictable as the outcome of Sunday’s referendum.

Since taking office in January, Prime Minister Alexis Tsipras’s moves have been tough for all but his closest aides to foresee. His decision to hold the vote on creditors’ demands just as a deal finally appeared close stunned European officials.

Now, how he and his left-wing Syriza party respond to the results—whatever they may be—could determine whether Greece crashes out of the euro. Mr. Tsipras’s signals have been characteristically enigmatic.

He has campaigned for a “no” to creditors’ bailout conditions, insisting it would give him a better bargaining position, a claim Europe rejects.

Such a vote would make it very hard for him to offer the kinds of economic overhauls Germany and other mistrustful lenders want if they are to offer the financing his country needs to stay in the common currency. He would have to show a diplomatic tact so far lacking.

And a “yes” vote could make it difficult for Mr. Tsipras to survive in office. But that doesn’t mean he wouldn’t try, with uncertain consequences and a potentially potent backlash.

9:01 am | UK's Cameron, BOE governor to assess Greek referendum fallout | by Jason Douglas

British Prime Minister David Cameron will chair a meeting Monday with the governor of the Bank of England and other top officials to assess the fallout from the outcome of Greece's referendum, U.K. Treasury chief George Osborne said Sunday.

Mr. Osborne told the British Broadcasting Corp. that the U.K. won't be immune to any economic or financial-market turmoil that follows the vote, even though it isn't a member of the 19-nation single currency union.

"I don't think anyone should be in any doubt [that] the Greek situation has an impact on the European economy, which has an impact on us. We cannot be immune from these developments," Mr. Osborne said in an interview on The Andrew Marr Show.

His remarks underscore how the Greek debt crisis is rattling nerves in capitals outside the eurozone. U.S. Treasury chief Jacob Lew, in a May visit to Europe, urged European policy makers to find a swift resolution to the standoff between Athens and its creditors.

The Bank of England warned Wednesday that the outlook for financial stability in the U.K. had deteriorated in recent days as the Greek debt crisis intensified.

Mr. Carney told reporters that British banks' direct exposure to Greece is minimal, but officials fret the Greek crisis could cause a selloff in financial markets or hurt the wider European economy.

The BOE governor said the central bank has been working with the U.K. Treasury and authorities across Europe to draw up contingency plans to shield the U.K. economy from harm, although he didn't elaborate. He did say regulators have in stepped up their scrutiny and engagement with the U.K. branches of some Greek lenders.

8:57 am | Investors brace for big moves after Greekvote | by Tommy Stubbington and Chiara Albanese

As Greece heads to the polls Sunday, investors in European stocks and bonds are gearing up for some big market moves, whatever the outcome.

With further political wrangling likely to follow Sunday’s referendum on Greece’s bailout and the country’s future in the eurozone hanging in the balance, “volatility will no doubt last for a while,” said Giordano Lombardo, chief investment officer at Pioneer Investments, which manages €226.3 billion ($251.4 billion) of assets.

Pioneer has cut back holdings of Spanish and Italian bonds and stocks to protect its portfolios from any potential selloff after the Greek vote. Assets in those highly indebted countries have been vulnerable in the past to fears that a Greek departure from the eurozone could foreshadow a wider splintering of the currency bloc.

Eurozone equities have drifted lower over the last month after a strong start to the year, with the Euro Stoxx 50 index of blue-chip eurozone companies losing nearly 4%. Investors are bracing for the most volatile markets since the height of the region’s debt crisis in 2012. The VSTOXX index—a eurozone measure of how much investors are paying for options to protect their equity portfolios against price swings—climbed to its highest level in three years on Friday. Read More.

8:54 am | Italian PM says Greek bailout talks must resume after referendum | by Giovanni Legorano

Italy’s Prime Minister Matteo Renzi said Sunday it was "obvious" that talks between Greece and its creditors will have to resume as of Monday, immediately after the results of the country's bailout referendum are known.

In an interview to the Rome newspaper Il Messaggero, Mr. Renzi said that a country as important as Greece cannot "end up like this," with people queuing for cash at bank ATMs.

However, he warned that Greece cannot be saved unless it implements a number of reforms to fix its crippled finances.

"It’s impossible to save Greece without the commitment of the Greek government: pension reforms, fighting tax evasion, the new labor market all depend on them," he told Il Messaggero.

8:49 am | Greeks head to polls | by Stelios Bouras and Nektaria Stamouli

Voters were heading to the polls Sunday to weigh in on whether to accept the demands of the country’s lenders, in a referendum that has laid bare stark divisions among Greeks about the struggling country’s future in the eurozone.

Noisy street rallies before the vote showed strong support for “no,” but the last published opinion polls suggested the referendum could go either way—with more difficult times expected ahead regardless of how it turns out.

The referendum has split Greece along lines of age, affluence and ideology. Polls show the young, many pensioners, the poor and those with pronounced left-wing or nationalist right-wing views are more likely to vote for a “no.” Middle-class, middle-aged and politically centrist voters are more likely to vote “yes” to protect Greece’s place in the eurozone.

8:45 am | Greek demonstration in Madrid

8:32 am | ‘No perfect solution’ | by Josie Cox

Gary Jenkins, chief credit strategist at asset manager LNG Capital in London, writes:

Whatever the outcome the actual reaction of the institutions should be the same. Whether it is a 'Yes' or a 'No' vote that prevails they need to set in place a medium term agreement that takes Greece off the front pages and gives it space and time in order to try to make structural changes and restore economic growth. ….

There is no perfect solution from this starting point. …But at this stage avoiding an uncontrolled default without setting a dangerous precedent whilst giving the Greek people some hope doesn't seem like a bad objective.

8:25 am | Are we about to witness a ‘Schrodinger’s’ Greece? | by Alen Mattich

Markets may be preparing for a binary Greek outcome this weekend: A ‘yes’ vote followed by a deal between Greece and its creditors; or a ‘no’ vote followed by Greece’s exit from the single currency region.

But there’s a third possibility–an indeterminate stasis that leaves nothing resolved, with neither Greece nor its creditors quite able to do a deal but also not willing to consider Greece’s exit from the single currency region. A sort of political version of the famous Schrodinger’s cat in physics, which describes a situation where a particle can both exist in all possible states at once.

So what do markets do then?

8:24 am | There could be Greek surprises in the pipework | by Todd Buell

Renewed concerns about a nasty Greek default and possible exit from the eurozone have revived interest in an obscure part of the financial system’s plumbing: the Target2 payment system.

What’s that? Well, it’s a complicated mechanism even for the most seasoned eurozone-watchers, but essentially it’s a system owned by the European Central Bank and national central banks (the Eurosystem) that allows payments to be settled across countries. And it’s ground zero for any fallout from a possible Greek euro exit.

8:16 am | Greek Prime Minister casts his vote

8:10 am | Mirage masked new Greek crisis | by Charles Forelle

But for many Greeks, any economic improvement has been a mirage, even before the financial chaos of recent weeks. Debt burdens have become harder to bear. Wages have tumbled, pushed down by policies intended to make Greek workers more competitive internationally. Social services have been cut to help close the budget gap.

As a result, Greek households have cut their own spending—and they have fallen behind on their debts.

The consequence, as Greece heads in to a momentous referendum Sunday, is a country broken both socially and economically. Read More.

8:08 am | Greek, German tensions mount | by Matina Stevis and Andrea Thomas

At newspaper kiosks in Greece, ahead of Sunday’s referendum, some front pages this week showed swastikas and the word “OXI,” Greek for “no.” On the streets of Athens, a poster showed German Finance Minister Wolfgang Schäuble with the words: “He’s been sucking your blood for five years. Now tell him NO.” In Germany, Greece’s most powerful creditor, the press have this week poured their own contempt and ridicule on Greek Prime Minister Alexis Tsipras, with epithets ranging from “extortionist” to “gambler” and “coward.” Whatever the outcome of Greece’s vote Sunday on whether or not to accept their international creditors’ demands for more austerity measures, tensions between Greeks and Germans over the debt crisis have now erupted into open displays of frustration and resentment that won't die down quickly. Read More.

8:06 am | How Greeks are projected to vote

See how Greeks are projected to vote in the referendum.

8:03 am | ‘Yes’ and ‘No’ campaigns battle for voters | by Stelios Bouras

The “yes” and “no” campaigns in Greece’s bailout referendum rested on Saturday after a short, sharp fight this week aimed at winning over the nation before Sunday’s historic vote. The campaign, and the emotive question of whether to accept or spurn creditors’ demands, has polarized the country. Campaigners used all the ways they could to get their message across to Greece’s 9.8 million voters, including posters, the press, public rallies and social media. Both sides adopted unusually dramatic tones in their arguments, often relying on fear. Read More.

8:02 am | Greeks are deeply divided | by Charles Forelle

Polls have the two sides evenly balanced. There are no public data that break down the demographics and the inclinations of “yes” and “no,” but conversations around this city depict a populace that is split in two: Haves and have-nots, young and old, those bitten by austerity and those less exposed, those with money in the closed banks and those without. Whichever side wins and whoever is leading Greece next week, next month or next year, the gulf will be hard to close. Read More.

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