Hypervigilant volatility in response to data and policy comments is the order of the day/week/month as traders assume central bankers are more impressionable with respect to the policy implications of upcoming economic data.

London was back in the office today after a 3-day weekend.  While UK traders had some bond selling to do to catch up with yesterday's weakness, it was mainland Europe that set the tone early in response to tamer regional inflation readings in Germany.  Gains were shallow and short-lived.  Sellers woke up after broader German inflation data painted a different picture just after 8am.   

The data was flanked by several hawkish comments from ECB and Fed officials with the net effect being a return to unchanged levels before bouncing back toward stronger territory.  Unchanged levels only lasted moments before stronger econ data came out at 10am and more hawkish ECB comments.  

The following chart shows the outsized moves in Europe over the past month and a half (both y axes are the same size):

The next chart zooms in to this morning's nitty gritty volatility.