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 / Updated  / Source: CNBC.com
By Dhara Ranasinghe

It's approaching that time of year where market activity typically slows, as traders and central bankers alike depart for long holidays.

But this summer is shaping up to be anything but quiet for markets, with Greece at a cross roads, stocks in China nose diving and rising uncertainty about the timing of a U.S. interest rate rise.

"Summers are always difficult in the markets but every summer turns out to be interesting and there's so much going on this summer," Bill Blain, a strategist at Mint Partners in London, told CNBC on Friday.

While the crisis in Greece, which holds a referendum this Sunday on whether or not to accept creditor-proposed bailout terms, is likely to be the trigger for near-term volatility, markets have much bigger fish to fry in the weeks to ahead.

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Take for instance the slide in Chinese stock markets, which is fueling concerns about the outlook for the world's second biggest economy.

The benchmark Shanghai Composite index, which had risen as much as 113 percent between November and a peak in June, has collapsed, sliding almost 30 percent.

"It's not Greece but China we should be concerned about," said Blain. "The correction that we're seeing in stocks is fascinating and the fact that the authorities are clearly nervous should make markets nervous," he said, referring to measures taken this week by Beijing to shore up the battered equity market.

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Fed up with Fed?

Analysts said uncertainty about the timing of a rise in U.S. interest rates was another key reason to keep traders on edge over the summer months, with Thursday's softer-than-expected June jobs data prompting a re-think on the rate outlook.

What June jobs miss means for Fed rate hike timing

"I think the biggest risk is not so much Greece; not so much China (stocks), which is in a dramatic move but is pretty localized, I think it is the Fed and the U.S. economy," Giles Keating, the global head of research for private banking and wealth management at Credit Suisse, told CNBC's "Squawk Box Europe" on Friday.

The timing of the Fed's first rate hike since 2006 and the pace of subsequent monetary tightening is viewed as one of the biggest risks to global markets – from emerging markets, which are seen among the most vulnerable to a rise in risk aversion, to bond markets, which have already seen heavy selling.

Slim Feriani, CEO of MENA Capital, said that while Greece was a concern, Fed policy was a bigger worry for markets.

"The bigger cloud hanging over markets in general in the next 6-12 months is the Fed and what they do and when," he said from a fund forum in Monaco earlier this week.

Blain at Mint Partners said there was no reason for the Fed to hike rates soon, as there was no pressure on the economy yet. He suggested that "perhaps a lot of the stock market upside has been overdone."

The tech-heavy Nasdaq hit a record high in June, while the broader S&P 500 closed at about 2,077 points on Thursday – about 2.5 percent off a record high hit in May.

Uncertainty surrounding Greece, meanwhile, is unlikely to go away, with Sunday's shock referendum suggesting the country will remain a source of market volatility in the weeks ahead, analysts said.

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Greece this week became the first advanced economy to default on a loan from the International Monetary Fund and its worsening financial crisis has fuelled fears that it will become the first country to leave the euro zone.

Will Greek referendum 'explain everything'?

If Greek voters back the creditors' bailout plan — which the anti-austerity government has recommended they reject — Greek Prime Minister Alexis Tsipras has made it clear he will quit.

"There is a view that we're going to get this referendum result on Monday morning and that will explain everything," Blain said.

"All the referendum will do is start the next phase of negotiations and the crisis continues. If we get a 'yes' vote, we could be dealing with a new government as it looks inevitable the government could fall -- so there lots of things for markets to worry about."