To be clear, bond markets are still in strongly positive territory this morning, though they're off their best levels seen just after 7am.

Volatility in global financial markets is elevated and some unique things are happening.  This has resulted in a fair amount of dogpiling on to seemingly easy explanations.  The price of oil and the status of Russia's currency--the Ruble--seem to be today's hot topics. 

In actuality, the oil story is quite old at this point, and it's doing more to follow other markets than to move them.  The Ruble story is up for debate today.  It clearly matters, but it's maybe HALF as important as big media has made it out to be.  Yesterday, sure.  Today, not so much.

Today's big story is Europe (though admittedly, Eurodollar trading is compounded by craziness in the Ruble).  In a nutshell, the mouthpiece for the German opposition to Mario Draghi's sovereign bond-buying goals threw more cold water on said goals.  Jens Weidmann, president of Germany's central bank said that inflation could be negative for several months and sovereign QE would still be a bad idea.

The result was predictable if you've been following along with my avant garde thesis about sovereign QE being bad for core bond markets and good for the likes of Italy, Spain, etc.  Italian yields sold off sharply (moved higher) and German/US yields rallied sharply.  That rally was clearly led by German debt and Eurodollars.  It was clearly compounded by weakness in the Ruble.  Finally, Treasuries clearly followed all of the above.