Having opened this morning at 75.5bp and 389bp, respectively, the Main and Crossover indices ratcheted down to 68bp and 358bp on the back of the news. The Senior Financials index also snapped tighter to 69.25bp, having opened at 76.25bp.

The story states that the governing council is working on buying corporate bonds and could discuss those purchases as early as the December meeting, with a programme beginning in Q1 2015. An ECB spokesman swiftly stated that the governing council had taken no such decision, but the market has decided there is no smoke without fire.

While it is too early to say what the exact modalities of such a programme would be, analysts have already begun speculating on what the ECB might do.

In a credit note published by JP Morgan, analysts wrote that the ECB's purchases would most likely be of issues with at least €500m (395.04 million pounds) outstanding that are included in the iBoxx Corporate index, due to price transparency and liquidity requirements.

"Within this, it is unlikely that the ECB would buy subordinated bonds as these are not even eligible as collateral in its refinancing operations," they wrote. "That leaves €750bn of non-financial corporate bonds that the ECB may consider buying, around €500bn of which is issued by European corporates."

According to JP Morgan, the ECB could also buy 10% of new deals from gross issuance of almost €20bn a month recently.

"Such considerations suggest that, as a rough guide, they could purchase around €50bn over a one year period, under current market conditions, and perhaps as high as €100bn."

(Reporting by Adam Parry and Laura Benitez,; Editing by Helene Durand, Julian Baker)

By Adam Parry and Laura Benitez