The referendum outcome in Greece, a clear victory for the No side, significantly increases the risk of a Greek euro area exit. We now give Grexit a 65 % probability, up from our pre-referendum 45 %. There is still a chance for a new deal, but the negotiations will in such a case be very difficult and the outcome will most likely be much harder on Greece, even if the Greek government initially will demand a softer deal.
The Greeks have voted and the answer is NO, but to exactly what? As the willingness to negotiate with the current Greek government looks limited, no easy solutions are left. Still, the European line ahead of the vote was far from united, so comments in the coming days from Euro-area leaders will be revealing. If an agreement can't be reached Greece will not be thrown out of the euro, but will likely drift out via the banking system. Markets will be hit by sizable uncertainty, but we do not see another financial crisis.
Read more in a comment by Nordea Markets.