German government bonds leapt Thursday to record peaks on the prospect of quantitative easing in the struggling eurozone, while stocks also pushed higher.
The interest rate or yield on Germany's 10-year bond sank to 0.709 percent, below the previous all time-low of 0.719 percent that was hit last month. Bond yields and prices move inversely.
The European single currency dropped to $1.2471 from $1.2506 late in New York on Wednesday.
"In an environment of plentiful liquidity in the global market, investors are driving down bund yields as investors anticipate further easing by the ECB," said Nick Stamenkovic, strategist at RIA Capital Markets.
"Equities are also rallying, aided by rising hopes that a weaker euro will boost earnings and euro area activity."
The German 10-year bond -- the Bund -- is the eurozone's key benchmark because Germany benefits from the most confidence among investors.
Stocks also rose, with London's FTSE 100 index up 0.06 percent at 6,733.14 points, while the Paris CAC 40 gained 0.16 percent to 4,380.43 points after an earlier technical problem.
Frankfurt's benchmark DAX 30 jumped 0.46 percent to 9,960.55 points compared with Wednesday's closing value.
Sentiment was somewhat subdued ahead of the Thanksgiving holiday, which will see US markets closed Thursday and open for shortened trade on Friday.
The European Central Bank's deputy president Vitor Constancio signalled Wednesday it could begin purchasing government bonds -- but not until next year.
"The ECB is clearly aiming to drive the euro lower as it attempts to expand its balance sheet, highlighting its accommodating monetary stance -- relative to the US Federal Reserve which is heading towards a normalisation of monetary policy," Stamenkovic added.
Frankfurt stocks were also boosted Thursday because, under a bond-buying plan, the ECB would be required to purchase German bunds in proportion to Germany's near 18-percent contribution to the ECB's capital base.
- Pumped by QE prospect -
"The DAX is just being pumped up by the prospect of QE," said VTB Capital economist Neil MacKinnon.
Constancio's remarks came after ECB chief Mario Draghi recently hinted the bank was ready to act quickly to deter deflation.
Neil Mellor, senior currency strategist at BNY Mellon, added that there was a "presumption" in markets that the ECB would "stick to higher quality assets" under any bond-buying plan.
He added: "And lower bond yields provide valuation support for equities -- along with the presumption of growing surplus liquidity."
Elsewhere, oil prices slumped Thursday to four-year lows on growing expectations that the Organization of Petroleum Exporting Countries will not take significant action at its output meeting in Vienna.
West Texas Intermediate for delivery in January dived to $71.89 a barrel -- the lowest level since September 2010. Brent North Sea crude hit a four-year trough of $75.48 per barrel.
Crude prices have tumbled by more than 30 percent since June, depressed also by a strong dollar and worries about stalling energy demand in a weak global economy.
On the London Bullion Market, gold slid to $1,196.50 an ounce, compared with $1,197.50 late on Wednesday.