The European Central Bank’s CBPP3 portfolio grew by Eu2.046bn in the week to last Friday, one of the smallest increases since the third covered bond purchase programme began and making it the third week in a row in which the rate of purchases appears to have fallen.

Settled and outstanding purchases under CBPP3 rose to Eu82.805bn, the ECB said yesterday (Monday) afternoon, from Eu80.759bn a week earlier. The weekly change in CBPP3 holdings is generally interpreted as registering purchases of covered bonds, although it can also reflect redemptions.

According to analysts at Crédit Agricole, average daily secondary purchases of Eu409m – implied by there having been no benchmark issuance in the corresponding period – are the fifth lowest since the programme started, and the overall daily average is the second lowest. The latest figure also reflects the third week of declines in daily averages in a row, although the analysts noted that this came after an especially high amount of secondary purchases last week.

“Whether this is already the slow-down many had been waiting for and a first sign that the Eurosystem struggles to find bonds in secondary markets or a one off we will have to see,” they said.

However, Jussi Harju, covered bond analyst at Barclays, noted that the period covered by yesterday’s total included Ascension Day on 14 May, meaning that the total incorporated only four business days’ activity. Taking this into account would imply daily secondary purchases of Eu512m, he said, meaning that secondary purchases were still slightly above average.

“Despite the slowdown in secondary purchases and the lack of primary activity, CBPP3 continues to buy over Eu500m of covered bonds each day and the Eurosystem’s ownership of the market continues to climb,” he said.

Bernd Volk, head of covered bond research at Deutsche Bank, meanwhile noted that pace of the ECB’s overall expanded asset purchase programme (EAPP) fell, suggesting that a speech by executive board member Benoit Cœuré released last Tuesday (19 May), in which he said that purchases would be front-loaded ahead of an expected summer lull, was over-interpreted.

“In our view, at this stage, a meaningful impact on the ECB’s strategy regarding EAPP seems unlikely,” he said.