The pace of CBPP3 buying increased substantially last week on the back of an increase in primary market activity, with settled and outstanding purchases up Eu2.317bn, but analysts noted that secondary market buying slowed again, falling to its lowest rate in an active week since the programme began.

European Central Bank figures released yesterday (Monday) show that the CBPP3 portfolio grew by Eu2.317bn to Eu104.003bn in the week to last Friday. Settled and outstanding purchases had increased Eu1.511bn in the previous reporting period.

Following the reopening of the euro covered bond market in July, eight CBPP3-eligible deals settled last week, totalling Eu5.75bn of supply. Analysts estimated the Eurosystem bought Eu1.4bn-Eu1.5bn of the new issues, making it one of the highest primary settlement numbers since the programme began.

But at Eu150m-Eu190m per day, according to analysts, secondary purchases had fallen to one of the lowest levels recorded.

“This is the second lowest secondary number of the programme,” said Florian Eichert, head of covered bond research at Crédit Agricole. “Only the week around Christmas when the CBPP3 was officially closed had a lower number.”

However, despite the low secondary turnover, analysts predicted that next week’s figure could show a portfolio growth at least close to Eu2bn, with Eu3.5bn of CBPP3-eligible deals comprised of four new issues settling this week.

The pace of public sector purchase programme (PSPP) buying also increased last week, from Eu10.263bn to Eu11.009bn in the previous reporting period.

Analysts noted that overall Eu61.3bn purchased under the Extended Asset Purchase Programme (EAPP) in July was lower than Eu63.2bn bought in June, with the fall coming from the CBPP3 and asset-backed securities purchase programme (ABSPP) components.