ECB’s Weidmann's comments drive German bunds higher

The German bunds gained on Thursday following additional bonds buying programme announced by the Bundesbank President Jens Weidmann. Also, the ECB in its latest release of the monthly economic bulletin mentioned increased uncertainty over the global economic outlook. This in turn, buoyed investors for safe-haven buying.

The yield on the benchmark 10-year bond fell 1-1/2 basis points to -0.048 percent and the yield on short-term 3-year note slid 1/2 basis point to -0.630 percent by 10:40 GMT.

The Bundesbank boss and ECB governing council's member Weidmann in an interview said that there is a possibility of adjusting bond-buying programme and allowing special conditions or focusing more on highly indebted countries would further blur the boundaries of monetary and fiscal policy.

Also, he said that this could raise questions about ECB's independence and also increase pressure to keep interest rates low if highly indebted countries could not withstand a rate rise. Increasingly buying bonds from countries with high debt or bad credit rating would distance Germany from core mandate, he added.

Moreover, the ECB -- in its recent monthly economic bulletin -- mentioned that the global outlook has increased and incoming data for second quarter pointed to subdued global activity and trade. He said risks to outlook for global activity and emerging markets in particular remain on the downside. The central bank further concluded that the Eurozone markets have weathered post-Brexit uncertainty, volatility with encouraging resilience and economic recovery expected to proceed at moderate pace.

Meanwhile, investors are awaiting the Bank of England’s monetary policy decision, which is scheduled to take place on August 4 at 11:00 GMT.

Lastly, markets will remain keen to focus on the upcoming economic data, highlighted by trade balance, Q2 GDP and consumer inflation.

Meanwhile, the German stock index DAX Index traded 0.63 percent higher at 10,234 by 10:40 GMT.