Markets prepare for the 'almost certain' Greek default tomorrow

European markets are absolutely cratering on Monday as Greek Prime Minister Alexis Tsipras' shock referendum announcement and the increasing likelihood that Greece will default looms imminently.

In fact, it's been pretty much accepted now, in most market circles, that Greece will not make its June 30 payment, even though the International Monetary Fund said last week it expected the country to make its €1.5 billion ($1.7 billion) debt payment that day.

Greek markets, like the banks, are closed for the next week until, what analysts predict, the scheduled referendum for Sunday, June 5, to prevent Greeks bleeding the banks dry. The news led to ridiculously long queues across the country.

Bank analysts are also releasing reams of research reports explaining why European stock markets are going crazy this morning.

Deutsche Bank's strategist Francis Yared said in a note that investors were caught off guard:

... following the concessions made by the Greek government a week ago, markets were increasingly expecting a resolution, and were therefore not prepared for such negative outcomes.

He's right. Look at where the European markets are at as of 10 a.m. BST (5 a.m. ET):

Now, after the revelations, investors are frantically preparing for Greece to not make its June 30 payment. Technically, if Greece does not make this payment, it would default.

Guy Foster, Group Head of Research, Brewin Dolphin said in a note this morning (emphasis ours):

Greece will clearly not make Tuesday's payment to the IMF. It may therefore be called "in default" or the IMF may choose to await the result of the referendum and further developments. With the payment in jeopardy the ECB felt unable to extend the size of ELA payments but maintained support at existing levels. That was not enough to negate the huge increase in demand for cash in Greece and so capital controls have been imposed until 6th July.

Barclays' analysts also said in a note (emphasis ours):

With political negotiations appearing to have hit deadlock, we think it is almost certain the Greek government will be unable to make the 30 June IMF payment, which also coincides with the end of the current bailout program.