Investors, meanwhile, have been on the lookout for an additional instrument to tackle so-called fragmentation, and there was some disappointment when officials didn't unveil one at their policy meeting last week. While government bonds have been jumpy for some time, the ECB has so far only allocated reinvestments from its pandemic asset-purchase program toward stabilizing what it considers unwarranted market turbulence. The ECB cannot simply pour money at the problem as monetary tightening and higher rates are actually needed.' European stocks dived to nine-month lows today, with banks and automakers bearing the brunt of the selloff, after Russia launched an all-out. 'In contrast to earlier episodes of disorderly market movements, however, inflation makes the difference this time around. World markets sink as Russian forces invade Ukraine. It is therefore projected that world cotton prices will decrease over the first few years (2016-18) of the outlook period, but will rise slowly afterwards, in nominal terms. 'The central bank needs to be concerned if investors cannot buy or sell bonds in secondary markets and issuers have to postpone funding,' said Christoph Rieger, head of fixed-rate strategy at Commerzbank. Large current world cotton inventories of over 80 of annual consumption indicate an over-supply on the market, thus market balances call for lower cotton prices. Italian yields fell back as much as 29 basis points to 3.89% at Wednesday's open, while the euro rose as much as 0.6% to 1.0475 against the dollar and money markets pared bets on a half-point rate hike next month to 50%. Investors are so far unconvinced the ECB can raise borrowing costs to combat unprecedented euro-zone inflation while also keeping yields among the bloc's most vulnerable members in check.ДЄ possible 75 basis-point rate increase from the Federal Reserve later in the day could add to the jitters. The announcement comes after the yield on Italy's 10-year debt rose above 4% for the first time since 2014 this week. The meeting will begin at 11am Frankfurt time, a person familiar with the matter said. The rate-setting panel will convene on Wednesday 'to discuss current market conditions,' according to an ECB spokesperson.

The European Central Bank's Governing Council will hold an unscheduled meeting to discuss the recent selloff in government bonds, which has grown in intensity after plans were announced to begin raising interest rates from record lows.

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