European Central Bank announces emergency meeting to discuss market rout

Christine Lagarde, President of the European Central Bank. The central bank has scheduled a last-minute meeting amid rising bond yields.

At a time when bond yields are surging for many governments across the euro zone, the European Central Bank is holding an emergency monetary policy meeting.

The central bank will hold an ad hoc meeting to discuss market conditions.

Borrowing costs have gone up recently. Europe's fear gauge has reached its highest level in over a year. The difference between Italian and German bond yields widened earlier in the day.

The Italian government bond's yield crossed 4% earlier in the week.

Concerns that the central bank will tighten monetary policy more aggressively than expected caused the bond market to move.

The investment community was alarmed by the lack of details about possible measures to support highly indebted nations.

The euro moved higher against the US dollar in the wake of Wednesday's announcement. Ahead of the market open in Europe, the euro was 0.7% higher.

According to the market reaction so far, some market players are expecting the ECB to address concerns over financial fragmentation and provide some clarity about what kind of measures it might take to support highly indebted nations.

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