The rate of CBBP3 buying slowed again last week, with the ECB announcing yesterday (Monday) that outstandings increased Eu2.230bn in the week to last Friday, although an analyst said that a pick-up in the pace of PSPP could reflect front-loading on that leg of the EAPP.

European Central Bank figures released yesterday afternoon show that total purchases settled and outstanding under the third covered bond purchase programme rose by Eu2.230bn to Eu92.113bn as of last Friday, from Eu89.883bn a week previously. This compares with a Eu2.606bn increase in the portfolio the previous week.

One CBPP3-eligible deal settled last week, a Eu1.5bn three year from Compagnie de Financement Foncier. Analysts’ estimates of the CBPP3 share of the deal ranged from Eu400m and Eu470m, but all saw the pace of secondary purchases as having slowed from the previous week, continuing a trend of below average secondary buying.

“Overall, this seems to suggest that paper is becoming increasingly hard to find and/or that the central bank is becoming less aggressive in the secondary market,” said Joost Beaumont, senior fixed income strategist at ABN Amro.

“As recent weekly figures have been volatile, we think it is still too early to draw a firm conclusion, although it is clear that the ECB is not at all front-loading covered bond purchases – for now.”

Some front-loading in expanded asset purchase programme (EAPP) buying had been expected ahead of the summer break, since ECB executive board member Benoît Cœuré on 19 May said purchases would be stepped up ahead of an anticipated lull in market activity.

The pace of PSPP buying increased last week, with the portfolio growing by Eu11.970bn compared with Eu10.649bn in the previous week, according to ECB figures released yesterday.

“The pace of purchases has been moving closer to the highs of Eu3.3bn per day reached at the beginning of the programme,” said Fritz Engelhard, head of strategy at Barclays. “This could signal that the ECB has started to front-load its purchases before the summer break.”