The ECB yesterday (Monday) announced an increase in settled purchases under CBPP3 of Eu4.071bn – the biggest of 2015 – but analysts differed as to whether the figure, which marked the first 2015 week of primary settlements, is in line with the ECB’s intentions for covered bonds under full-blown QE.

The second largest increase yet recorded takes total outstandings of the European Central Bank’s third covered bond purchase programme to Eu37.202bn, following more modest increases of Eu1.840bn and Eu1.659bn in the weeks previous, and reflecting average daily purchases over the five days of Eu814m.

The higher figure had been expected by market participants because last week was the first of the year in which primary market deals settled – with 11 CBPP3-eligible transactions worth Eu8.75bn settling within the relevant period. The weekly figures, released each Monday, include only purchases settled as of the previous Friday.

“The increased pace of purchases reflects the higher-than-average primary activity in the second week of January rather than the ECB becoming more aggressive with its covered bond purchases,” said Jussi Harju, covered bond analyst at Barclays.

He estimated that the ECB bought Eu2.35bn of eligible deals in the latest reporting period, meaning that average daily CBPP3 purchases on the secondary market slowed from Eu368m in the previous week to Eu344m last week.

“Indeed, this is in line with our expectations that the ECB will eventually become less aggressive with its covered bond purchases,” he added.

Joost Beaumont, senior fixed income strategist at ABN Amro, estimated that primary market purchases contributed to Eu2.3bn of the week’s increase and described the likely level of secondary purchases as “in line with” previous weeks, but agreed that CBPP3 buying is likely to slow following the ECB’s QE announcement.

“Our calculations show that the ECB will buy around Eu5bn-Eu10bn of covered bonds a month, while the current and past pace has been more in the Eu10bn-Eu14bn a month area,” he said.

However, Florian Eichert, senior covered bond analyst at Crédit Agricole, estimated that the pace of secondary market buying increased from Eu368m in the week previous to Eu446m last week, nearer his estimate of a longer term average of Eu479m. This reflects a lower estimate, Eu1.841bn, of primary market purchases’ contribution to the latest increase.

“In general we don’t think that the ECB releasing their extended asset purchase programme will reduce the CBPP3 figures in the short or longer term,” Eichert said. “First of all, they will not start buying until March. Secondly, private sector debt remains firmly on the agenda and is part of the Eu60bn [total monthly QE figure announced by the ECB]. And looking at the ABSPP and the breath-taking pace it has shown so far [only Eu2.266bn of total purchases], covered bonds are their go to product, unfortunately.

“And last but not least think about it from the political angle – every billion of balance sheet growth achieved via private sector debt and not sovereign bonds is good for the climate and sentiment within the governing council.”

Three CBPP3 eligible deals are due to settle this week, worth a total of Eu2.25bn.