Just as we warned was likely (how many times have we seen this game played), The ECB has come out this morning to explain to the market that the reaction to Draghi's hawkish speech yesterday was entirely mistaken. The reaction is clear - EUR and Bund yields are tumbling.

Vice President Vitor Constancio scrambled to set the record straight, saying the remarks were “totally” in line with existing policy and the response by investors was hard to understand.

Following the euro’s biggest daily jump in over a year, in what could be interpreted as verbal intervention, ECB’s Constancio said that market reactions aren’t always understandable and that Draghi didn’t say anything new in regards to recent ECB policy.

Mario Draghi’s speech in Sintra on Tuesday was “totally” in line with recent ECB policy, ECB Vice President Vitor Constancio said in an interview on CNBC.

And the reaction is clear...

And Bund yields are down 5bps already...

It is very clear now that The ECB is terrified of a new bond tantrum... just as we noted earlier...

Global Bonds Sell Off, Sparking Fears of Further ‘Taper Tantrum’ https://t.co/rJjIAlVtbJ

Don't worry, Draghi will be dovish in 90 minutes

— zerohedge (@zerohedge) June 28, 2017

“I don’t think his speech was a big surprise, but you saw the market reaction,” said Joachim Fels, global economic adviser at Pacific Investment Management Co., who attended the forum. “It’s a warning sign that there are some unintended consequences as central banks head toward the exit.”