Here is what's going to happen to markets on Monday

Fear is in the air as markets prepare to open

Greece is headed for a referendum next weekend, the ECB has cut off Greek banks and Greece will default on its IMF loans Monday.

Here is what analysts at Westpac expect to happen to markets in response:

"We expect a very strong risk averse tone to pervade global markets as soon as Asian opens for trading and throughout much of the week: equities lower (perhaps 2-4% for key markets), bond yields lower (perhaps 15-25bp for core markets) and the likes of the USD, JPY and CHF to be very well supported (perhaps +1 to 2% against G10 peers). EUR/USD will likely trade down to 1.10 early this week though with higher yielding and EM currencies likely to fall as well EUR may 'perversely' rise on some crosses."

They say the euro could continue to hold firm against the higher-yielding dollar bloc )AUD and NZD especially) and emerging market currencies.

"make no mistake, this weekend's developments are bearish for the euro - they represent a confidence shock for the region, are negative for the region's growth prospects and raise the odds of an expanded ECB QE program."