Bond markets began the day almost perfectly unchanged relative to yesterday's latest levels.  That means the nasty little afternoon selling spree was still priced-in as of this morning.  That continued to be the case until the 11am hour.

At that point, European markets were beginning a decisive risk-off move heading into the end of their trading day.  This was fueled primarily by Italy being put in the hot seat at an EU summit.  While that wasn't the initial aim of the summit, Italy became the focus due to concerns among other EU nations regarding adherence to budget rules. 

In other words, the other countries were telling mom and dad (EU Commission) "hey!  make Italy play fair."

Italy has been throwing a bit of a tantrum saying "I don't wanna and I'm not gonna!"

Stern Uncle Mario (Draghi), the family's financial guru told everyone "when one of you crazy kids isn't playing fair, it hurts the whole family."  (Draghi told Italy--indirectly--to knock it off).

Mom and dad agreed with Uncle Mario and said as much in their own words (EU Commission told Italy to knock it off).

This European family squabble did noticeable damage to EU stocks and caused a big rally in EU bonds that spilled over into the US.  Once European traders were done for the day, US markets leveled off and drifted sideways.