This round of buying was caused by the spike in Bund yields which popped to come within a whisker of the 1% level as the bond rout in European fixed income markets continued. Yesterday, during the ECB presser, President Draghi noted that fixed income markets could become much more volatile given the very low yield levels.

This is perhaps the unintended consequence of the ECB QE program. Policymakers have been lulled by the assumption that QE serves as a volatility dampening blanket over the capital markets, but that was only true under the US experiment, which was first to try unconventional measures.

With the ECB now the last major central bank to employ QE the markets moved way ahead of policymakers and bid Bunds down to virtually zero yields even before the ECB could put its program in place.The end result is that EZ fixed income markets have now become massively more volatile and that volatility contagion has spread to FX.

The euro has now risen 500 points in just 48 hours and this type of volatility could continue for a while as fixed income markets find some equilibrium. The price action is sure to make an impression on policymakers on this side of the Atlantic as Ms. Yellen and company carefully consider the consequences of rate hikes. The Fed is loathe to create any unnecessary volatility and may decide to err on the side of caution, hiking rates later than expected.

The Hedge funds safety net of equity and bund rally is  now removed as "normalisation " returns to market place ; therefore limiting HFT plays and reducing liquidity and real volume struggles to find counter matches ; something exchanges governances need to sort .!