The lack of price visibility was blamed for accelerating a sell-off in European shares, while trading volumes in German government bond futures contracts fell by around a third.
The 10-year bund is yielding around 0.75 percent, around all-time lows, compared with the 10-year Japanese government bond (JGB) at around 0.45 percent after a decades-long downtrend.
Patrick Legland of Societe Generale explains to CNBC-TV18 that with ECB support and the banking crisis receding, investors are withdrawing funds from safe havens such as the German Bund and the French OAT to invest in peripheral European economies such as Spain, Portugal and Greece.
Gold inched up on Tuesday ahead of a Group of Seven conference call that will attempt to discuss measures to contain the euro zone debt crisis that has threatened to drag the global economy into a recession.
The euro hit a three-week high and global shares gained on Wednesday before a key policy statement by the US Federal Reserve, buoyed by better-than-expected corporate earnings and signs of improved sentiment in the euro zone debt market.
Julian Callow, chief European economist at Barclays Capital spoke to CNBC-TV18 about his expectations of market reaction to the euro summit.