This was what I was looking for in yesterdays news conference from Trichet (which he failed to deliver)
Appears to be the reason for the reversal... or Trichet really likes technical analysis and wanted to help the market ;)
Reuters saying ECB telling Italy it will buy Italy and Spain bonds if they commit to bring forward specific reforms
In due time, the ECB's balance sheet will be as chock full of debt as the Fed's is.
The European Central Bank is demanding that Italian Prime Minister Silvio Berlusconi commit to fast-track specific welfare reforms and a constitutional amendment enshrining a fiscal rule before it will buy Italian bonds, sources close to the matter said on Friday.
The sources, speaking on condition of anonymity because of the sensitivity of the issue, said the ECB had agreed in principle on Thursday to buy Italian and Spanish bonds if key structural reforms were brought forward.
Berlusconi's office said he and Economy Minister Giulio Tremonti will hold a news conference at 1700 GMT, although it was not clear whether he will make an announcement along those lines.
Top European Union leaders were applying concerted pressure on Berlusconi to make an announcement by the end of the weekend so that the ECB could intervene in bond markets early next week
The ECB has already signalled their will to act. People in the market say the ECB has started inquiring about Italian bond prices, but it hasn't bought any, one source said.