Extra no-standard measures were fully expected. What was not expected was that Draghi would out-Bundesbank the Bundesbank and completely shut the door on two of the market’s fondest wishes:

  1. That the ECB would buy unlimited amounts of bonds to limit rate rises in highly-indebted countries
  2. That the ECB (or individual national central banks) will lend money to the IMF to skirt the rule against the ECB financing euro-area governments

Selloing rallies looks like the way to go near-term as suddenly there is no easy way out for the euro zone. The job of stabilizing the situation just got much more difficult.

Italian and Spanish bond yields are up 25 bp in the wake of the press conference, a clear sign of renewed stress.