Bond yields continued higher on Mario Draghi's comments

The ECB meeting provided little news and the introductory statement was broadly unchanged from mid-April. However, bond yields continued higher on Mario Draghi's comments despite his continued signal of full QE implementation. Regarding the sell-off in the fixed income markets, Draghi concluded 'we should get used to periods of higher market volatility'. 

According to Danske Bank, this clearly removed any belief the ECB may be concerned with the sell-off and was accompanied by another fierce rate increase of 10bp in 10Y Germany. The move reflects the market expecting Draghi to deliver some sort of comforting words that he did not deliver. 

German rates are leading this move, with other fixed income markets such as the periphery mirroring the movement (i.e. unchanged spread to Germany after the meeting - and tighter over the past 36 hours on the improved pace of the Greek negotiations).