On Sunday, Greek PM Alexis Tsipras put his political future and, more importantly, the future of the common currency in the hands of Greek voters. It was the political equivalent of pushing one's chips all in at the poker table and after Sunday's referendum, Tsipras appears to have been holding a better hand than Junker, Dijsselbloem, and Merkel. 

With his grip on power in Greece now virtually unassailable (at least in the short-term), the PM will need to switch gears quickly. Having won the political battle, they must now fight the economic war, and while Sunday's plebiscite may have given the world some clarity in terms of what the Greek government's mandate truly is, we are no closer to solving the stalemate which has brought the Greek banking sector to its knees and threatens to plunge the country even deeper into depression. 

In fact, Sunday's vote represents a kind of worst case scenario for financial markets. The fact that Greeks' resounding repudiation of austerity may well have been influenced by the IMF's tacit admission that the country should indeed hold out for debt relief from EU creditors sets a dangerous precedent for Europe. Christine Lagarde effectively forced Brussels and Berlin to blink on the eve of the referendum and you can bet that Podemos in Spain, the Socialists in Portugal, and the Five Star movement in Italy are watching closely to see what happens next.

If Greece proves that the will of the people and the threat of a voter-supported EMU exit is sufficient to secure debt writedowns, the experiment that is the currency bloc will begin to crack as soon as this fall when elections are expected in Spain and Portugal. This threat alone will likely be enough to push spreads on periphery bonds wider in the short-term and may well introduce quite a bit of unwanted volatility in EU equities as well.