Euro zone bond yields have nudged lower after a European Central Bank policymaker, among the most resistant to monetary easing, said its bond-buying programme could be adjusted to prevent a scarcity of eligible debt throwing it off track.
Market expectations have risen that the ECB will soon change the rules of its asset purchases scheme, which put more than half of Germany's bonds out of reach and amid growing signs that purchase limits are being reached in smaller countries such as Portugal and Ireland.
At its meeting last month, ECB chief Mario Draghi said policymakers had not discussed specific changes, but that technicalities would not stand in the way of asset buys and that it would reassess after fresh economic projections in September.
Jens Weidmann, the president of Germany's central bank who has previously voiced doubts about the effectiveness of QE, said in an interview published today that changes could be made as long as they didn't alter the underlying design of the scheme.
German 10-year bond yields, the euro zone benchmark, fell 1 basis point to minus 0.10%, while most other euro zone equivalents are 1-2 bps lower.
The euro was slightly weaker against the US dollar.
Sources close to the ECB have previously told Reuters that the bank is not considering such a move, while bank estimates show that it may not significantly extend a scheme which many expect to continue far beyond its scheduled end in March 2017.
Other changes to the scheme to try and alleviate issues of bond scarcity could include dropping the rule on not buying debt yielding less than the deposit rate, which currently omits many German bonds, or raising the central bank's limit on only buying a third of a country's debt and each individual bond.
The latter though could risk the ECB building such a large stake that it blocks future debt restructurings in the euro zone, lawyers have warned.
The ECB currently buys bonds weighted to each country's contribution to the central bank's capital.
Germany is currently the biggest beneficiary therefore, but changes could potentially allow other countries with higher debt loads to benefit more.
Mr Weidmann said an increase in buying bonds from countries with particularly high indebtedness or bad credit ratings would distance the ECB further from its core mandate.
Euro zone bond investors were also waiting to see whether the Bank of England would, as expected, relax its monetary policy for the first time since 2009 today to counter any economic fallout from Britain's vote to leave the European Union on 23 June.
Some economists also expect the bank to revive its own bond-buying programme.
Any resulting move in British bond yields would likely spill over to other global debt benchmarks.
