A German magazine reported the ECB was considering setting interest rate thresholds for bond purchases, meaning it would buy debt issued by vulnerable states if their interest rates exceeded a set premium over Germany's Bunds.
Traders said that helped drive Bund futures down nearly a point on the day and gave impetus to a rally in Spanish debt.
Even though the euro weakened when a spokesman later said Germany's finance ministry had no knowledge of such a plan, there was little change in bond market pricing.
Ten-year Spanish yields were 24 basis points lower on the day at 6.25 percent while the September Bund contract was last down 85 ticks at 141.27.
There was also limited reaction to a Bundesbank statement reiterating opposition to the European Central Bank buying the bonds of debtors such as Spain and Italy.
However, thin trade exaggerated price moves, and further details on the ECB plans would be needed before such price moves could be seen as a sustainable trend, market participants said.
"Many in the market would still have doubts about whether the ECB has the capacity to make this work. It would actually require (the ECB) to pledge unlimited purchases which I think does not really fit with their mandate," said Elwin de Groot, senior market economist at Rabobank in Utrecht.
The expectation of mass buying of short-maturity Spanish debt has already halved Spanish two-year yields since ECB President Mario Draghi said on July 26 the bank would do whatever it takes to preserve the euro.
However, policymakers remain in the early stages of thrashing out the details of any aid, with a series of critical meetings scheduled in the next few weeks, and Germany's Bundesbank, the central bank of Europe's largest economy, is fiercely opposed to restarting the bond buying programme.
"As much as there might be a risk-on move into September's events, you've got to realise that the Germans can dig their heels in, the Dutch will do the same around election time and the Finnish still have collateral demands - northern Europe is not happy about this," a trader said.
The ECB holds its regular policy-setting meeting on Sept. 6 followed by a meeting of euro zone finance ministers on Sept. 15 -- both of which were expected to shed some light on plans to help Spain tackle its costly debt burden.
"A lot of the real money guys are out at the moment, I think if they'd been around we'd be seeing a lot more buying on these dips in the Bund... for the time being it's just wait until September," a second trader said.
In the interim, Bunds headed back towards 140.78 -- the bottom of the wide range seen in last week's choppy trade.
The exact mid-point of that range, 142.22, should offer resistance to any price rises, while momentum indicators still signal further losses, according to UBS technical analysis.
Since late July, when the contract rose to 146.26, the outlook for Bunds has turned more gloomy and the fall is approaching critical levels, analysts said.
A break below the June 26 low of 139.72 would indicate fresh falls, which could extend as far as the lows plumbed last November around 134
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