ECB plans emergency monetary policy session

Following a recent increase in bond yields for many governments around the eurozone, the European Central Bank is holding an emergency monetary policy meeting on Wednesday.

“They will have an ad hoc meeting to discuss current market conditions,” a spokesperson for the central bank told CNBC.

The cost of borrowing has recently increased significantly for many countries. Earlier on Wednesday, the spread between Italian and German bond yields, sometimes known as Europe’s fear gauge and closely tracked by investors, extended to its widest point since early 2020. This week, the yield on the 10-year Italian government bond likewise surpassed the 4% threshold.

Bond market movements that reflect investor trepidation are related to worries that the central bank may tighten monetary policy more quickly than anticipated. Additionally, the ECB’s failure to provide any information regarding potential steps to rescue highly indebted euro zone countries last week added to investor concerns.

But following Wednesday’s news, bond yields decreased and the euro appreciated against the dollar. Prior to the start of trading in Europe, the euro increased 0.7% to $1.04.