LONDON: German Bunds pushed higher on Thursday as uncertainty over when the US Federal Reserve will start scale back its stimulus programme soured investor appetite for riskier assets.
Low-risk Bunds were also supported by expectations the European Central Bank will keep monetary policy ultra-easy at its meeting later in the day.
With the ECB widely expected to keep interest rates unchanged at 0.50 percent, the market will be focusing on President Mario Draghi's news conference for a steer on the future direction of policy.
Market participants expect a subdued reaction if Draghi maintains a dovish tone and attention could quickly turn to US non-farm payrolls due on Friday for clues to Fed policy.
"We think (Draghi) will keep the door open for more easing but it's not the time to do it today," said Piet Lammens, a strategist at KBC in Brussels.
"In that context the market will be more focused on what happens tomorrow with the payrolls. So we expect subdued reaction from the markets to Draghi."
Bund futures were up 11 ticks at 143.90. Technical analysts said it could be tough to extend gains near-term.
"The technical setting remains difficult despite yesterday's recovery. The situation should only improve if there is a lasting rise above the downtrend channel that has prevailed for four weeks, at 143.90," Helaba Landesbank Hessen-Thuringen analysts said in a note.
The German 10-year bond yield was down 1 basis point at 1.46 percent. It hit a near three-month high of 1.534 percent on Monday as broadly upbeat US data increased investor concern the Fed may "taper" its bond purchases sooner than initially thought.
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