The European Central Bank (ECB) announcement and press conference were hotly-anticipated as today's key events and they did not disappoint.  The announcement itself (out at 7:45am ET) was generally well-received as it hinted at additional bond-buying potential as well as the willingness to cut rates even further if needed.  Really, the only shortcoming relative to the most optimistic speculators was that there was no outright cut to the deposit rate.  

Surely, then, Draghi would be along 45 minutes later to tell the world how carefully the ECB had considered cutting rates in an attempt to aggressively address disinflation and a marked manufacturing slowdown.  Alas, no!  In fact, Draghi said the governing council of the ECB didn't even discuss a rate cut.  He also made a somewhat puzzling case for the absence of recession risk despite fully admitting that the outlook continues to get worse and worse.

All financial markets heard was that rate cuts and more accommodation were slightly less guaranteed than they anticipated over the past 2 days.  European bonds probably got a bit ahead of themselves during that time and were thus forced to correct just a bit.  Notably, today's closing yields in the EU would have been all-time lows on Tuesday afternoon.

Treasuries mirrored and matched the European momentum for most of the morning.  They even managed to avoid any major reaction to the stronger Durable Goods data, but in their defense, the data wasn't so strong by the time revisions were considered.  10yr yields rose more than 9bps trough to peak, but settled into a 2-3bp loss on the day by the afternoon.  Fannie 3.0 MBS gave up half a point in PRICE peak to trough, but are heading out the door with only 6 ticks (0.19) of weakness intact.