The breakdown of talks between Greece and its lenders has created a turbulent start to the week ahead for markets that have largely been taking a complacent view of the crisis.
U.S. stock futures were sharply lower Sunday night as investors weigh the possibility of a Greek exit from the euro zone after the talks toward resolving its debt crisis failed.
Greece's Prime Minister Alexis Tsipras set a referendum for July 5 and Greece instituted a bank holiday as Greeks rushed to ATM machines.
"We expect equity markets to suffer broad declines," says Marc Chandler, head of foreign exchange strategy at Brown Brothers Harriman. Chandler said he expects the euro to weaken and investors to move into yen and Swiss francs, in a safety trade.
Jens Nordvig, Nomura currency strategist, also expects the euro to decline, but he said what will be telling for markets will be how sovereign yields perform in European trading and whether traders take a view there on whether there is potential contagion from Greece.
But market focus will also be on the June employment report later in the week. The report may perhaps be even more important as a strong report will bring into play speculation about Federal Reserve tightening as the European Central Bank maintains its easy stance and deals with Greece.
That jobs report Thursday will be the U.S. data highlight of the four-day, Fourth of July holiday week. Wednesday is also an important day for data with the ISM manufacturing survey, monthly auto sales, ADP's employment report and construction spending.