Australia’s stronger GDP number released last week has reduced expectations that interest rates will be cut again by the RBA.
This did not help the yield-sensitive banking sector, which was subsequently sold off. In fact, banks have been a major cause of the 3% decline in the Australian market during the past two weeks. 
Much of the problem is coming from overseas investors exiting Australian banks in favour of European and US bank.
The US banking sector is becoming more attractive as US long bond yields rise. Rising yields support overseas bank margins making them more attractive than Australian banks.
Looking at the United States, - news last week showed a clear resurgence in economic momentum with vehicle sales hitting a nine-year high and employment increasing by 280,000 in May.
Overall, current strength in the labour market and the accelerating economy is probably not enough to persuade the US Federal Reserve to raise interest rates before July. A rate hike by September is now more likely.
Greece defaulted on its payment to the IMF on Friday but markets didn't seem care.
Greece has put forward a debt restructuring plan - incorporating a number of measures that it estimates would bring its public debt-to-GDP ratio down immediately - from 180% to less than 120%. But whilst discussions continue, it seems very unlikely that all elements of the plan would be accepted by Greece's creditors.
The risk of a disorderly default and exit for Greece in the near future has increased.
Against all this, global bond yields rose. Bond funds that track long-dated government bonds could have lost more than 5% since the beginning of the year. This loss and further prospects of rising yields could cause further outflows from bonds into cash and equities.
The rates on government bonds in the US, Japan and Europe remain artificially low due to their Quantitative Easing programs. This is because the Quantitative Easing programs have purchased significant amounts of bonds leading to reduced supply. Take the US, for example - 10-year bonds should be yielding closer to 4% based on nominal GDP growth rather than their current 2%.
Bond yields in other parts of the world have followed suit and also become artificially low.  Based on nominal GDP, Australian long bonds should be trading above 5% but are currently at 3%.
This artificial reduction in yields has also increased the risk associated with bonds, which will rise further if inflation begins to accelerate.