The European Central Bank reported an increase in settled CBPP3 purchases of Eu1.659bn yesterday (Monday), marketing a slow start to the year in a shortened week interrupted by public holidays and in which no eligible primary market deals were settled.

The increase took the total outstandings of the ECB’s third covered bond purchase programme to Eu31.291bn as of last Friday, versus Eu29.632bn a week previously.

Analysts said that rather than indicating any change in approach on the part of the ECB, the modest increase likely reflected the period in question corresponding to only three possible days of activity (due to CBPP3 being suspended up to 2 January), the market not yet being up to speed, and it only taking in secondary purchases because no primary market issues settled in the relevant period.

“The CBPP3 has thus bought Eu652m of covered bonds in the secondary market per day last week, which is pretty much bang in line with what they did last year,” said Florian Eichert, senior covered bond analyst at Crédit Agricole.

Joost Beaumont, senior fixed income strategist at ABN Amro, added that CBPP3 should pick up pace in the coming weeks, with primary activity already underway.

“It is too early to read too much into this figure,” said Beaumont. “But if continued, it would imply that the ECB is reducing its presence in the market.

“Overall, we think that the ECB is unlikely to do so, as it still needs to buy a large amount of covered bonds if it wants to significantly increase the size of its balance sheet – even if it would buy around Eu500bn of euro area sovereign bonds. As such, we expect next week’s figure to be higher again, not least as the first CBPP3-eligible deals came to the market today (Monday).”

The European Central Bank reported an increase in settled CBPP3 purchases of Eu1.659bn yesterday (Monday), marketing a slow start to the year in a shortened week interrupted by public holidays and in which no eligible primary market deals were settled.

The increase took the total outstandings of the ECB’s third covered bond purchase programme to Eu31.291bn as of last Friday, versus Eu29.632bn a week previously.

Analysts said that rather than indicating any change in approach on the part of the ECB, the modest increase likely reflected the period in question corresponding to only three possible days of activity (due to CBPP3 being suspended up to 2 January), the market not yet being up to speed, and it only taking in secondary purchases because no primary market issues settled in the relevant period.

“The CBPP3 has thus bought Eu652m of covered bonds in the secondary market per day last week, which is pretty much bang in line with what they did last year,” said Florian Eichert, senior covered bond analyst at Crédit Agricole.

Joost Beaumont, senior fixed income strategist at ABN Amro, added that CBPP3 should pick up pace in the coming weeks, with primary activity already underway.

“It is too early to read too much into this figure,” said Beaumont. “But if continued, it would imply that the ECB is reducing its presence in the market.

“Overall, we think that the ECB is unlikely to do so, as it still needs to buy a large amount of covered bonds if it wants to significantly increase the size of its balance sheet – even if it would buy around Eu500bn of euro area sovereign bonds. As such, we expect next week’s figure to be higher again, not least as the first CBPP3-eligible deals came to the market today (Monday).”