This morning's commentary said "things get serious," and that we could well expect to depart the recent range in a big way.  Now, we are. 10yr yields are already up to 2.373--a new high for 2015, and mortgage rates are well into 2015 highs with Fannie 3.0s down a full point today.

The week's first big ticket event delivered the drama as Draghi did what everyone hoped he wouldn't do.  Speculation mounted earlier this year that the ECB might amend their bond buying timeline.  Just a few short weeks ago, he reaffirmed the September 2016 deadline.  Now in today's press conference, he said that the ECB could end purchases sooner if conditions allowed.  My goodness... they just don't know how to overpromise and overdeliver across the pond! 

If the Fed pulled this crap (announcing a dollar figure stimulus package and then going back on it just a few months after it began), the backlash would be nothing short of apocalyptic.  The fact that we're ONLY seeing this much backlash to European bankers acting like fickle children is astonishing.  That's today's big positive news... It's "only" this bad.

Losses increased exponentially as Draghi's press conference continued.  While this is the biggest motivator for the day, it's not without help.  The inflation component of the ISM data further supports a Fed rate hike, and "as-expected" ADP employment data offers no hope that this Friday's NFP will come in significantly lower than forecast.  On top of that, there is ongoing corporate issuance pressure--a constant theme of late. 

Finally, and perhaps the hardest to explain, is the simple tradeflow snowball.  This has to do with traders making trading decisions based simply on the observation of other trades in relation to one's own existing trading positions or portfolio balancing needs.  In other words, if I have a position in Treasuries that begins to lose money if yields rise to a certain level, I might have an automatic sale order set up somewhere just under that level.  When that gets triggered, it creates another sale that someone else may in turn be watching for their cue to do the same.  Snowball selling...

In a broader sense, markets are concerned that we're confirming a bounce in a 30yr bull market.  Of course, that would take several years to truly confirm, but no one wants to be on the wrong side of the trade if it ends up happening.