The pace of CBPP3 purchases has increased for a second consecutive week, defying the summer market slowdown and analysts’ expectations, with the portfolio growing by Eu2.642bn last week on the back of a significant increase in secondary buying.

European Central Bank figures published yesterday (Monday) show that settled and outstanding purchases under the third covered bond purchase programme increased Eu2.642bn to Eu106.645bn in the week to last Friday, compared with a Eu2.317bn increase in the previous reporting period.

This, analysts noted, lifted the pace of buying to around the longer term average, after many weeks of below average increases.

Analysts had last week expected the weekly volume of purchases to decrease to around Eu2bn, noting that four CBPP3-eligible deals totalling Eu3.5bn settled in the relevant reporting period, while eight totalling Eu5.75bn had settled in the previous week. The ECB had itself anticipated lower expanded asset purchase programme (EAPP) buying during August.

However, a week after secondary purchases fell to one of the lowest levels reported in the history of the programme, analysts said yesterday’s figure showed that secondary purchases increased from around Eu152m-Eu187m per day to around Eu340m per day last week.

“Logically, the figures should have fallen substantially from the week before as the primary market is now closed for the summer break,” said analysts at Société Générale. “But national central banks have been active in secondary, though, and we report significant CBPP3 purchases in a number of jurisdictions such as Italy, France and Germany.”

Next Monday’s CBPP3 figure will relate only to secondary purchases and should therefore drop below Eu2bn, analysts added, with no eligible deals settling on the primary market this week.

The pace of public sector purchase programme (PSPP) buying meanwhile decreased, with the portfolio increasing Eu10.809bn last week, compared with Eu11.009bn in the previous reporting period.