Is it a yoyo? Is it a penny stock? Is it the most "liquid" European government bond?
To those who answered correctly - yes, this was the response of the German 10Y Bund yield to Draghi's prepared remarks and subsequent Q&A - congratulations.
While it was not certain what specific catalyst(s) prompted the two inflection points, bund futures dipped to day’s low of 161.55 (-37 ticks) as Draghi said that the Governing Council will take decision “in autumn,” in line with source comments earlier this week, adding to market conviction of a taper announcement at the ECB’s Sept. or Oct. meeting. However, futures then quickly bounce after Draghi clarified the infamous Sintra speech, addressing the market focus on “reflation” specifying the technical definition is for a return to trend inflation.
Draghi's subsequent admission that there has been no discussion of tapering scenarios by the ECB did not help the hawkish case, nor the addition that not one data point will trigger tapering:
“We aren’t looking for a specific data point which triggers one behavior or another" Draghi said, noting that “There is more information we can look at between now and then.”
“It’s basically the sense of the Governing Council that we have more confidence in taking a decision with more information than we have today” Draghi added.
In other words the ECB itself remains confused, and so one hour after Draghi's monetary press conference, and one month after the "Sintra spectacle", nobody still has any idea what is going on.