Wave of contagion expected after dramatic weekend raises 'Grexit' chances

European markets are braced for a wave of contagion from Greece on Monday, with heavy losses for southern European government bonds and regional stock markets expected as investors scramble to discount a possible "Grexit" that most had still assumed was unlikely as late as Friday afternoon. The European Central Bank on Sunday then capped the amount of emergency financing it extends to Greek banks at last week’s levels despite reports of further heavy deposit withdrawals over the weekend. "If Greece has to put capital controls in place, that is going to have a real big impact on markets and that will generate increased volatility," said Ian Stannard, European head of FX strategy at Morgan Stanley in London.

Wave of contagion expected after dramatic weekend raises 'Grexit' chances source: http://finance.yahoo.com/news/wave-contagion-expected-dramatic-weekend-160624873.html