The ECB’s CBPP3 portfolio grew by Eu1.474bn last week, representing a slowdown for a second consecutive week, but it is expected to redound next week on the back of a pick-up in primary market activity. The ABSPP programme meanwhile jumped more than Eu1bn, a new high.

Settled and outstanding purchases under the third covered bond purchase programme as of Friday reached Eu126.101bn, according to figures released by the European Central Bank yesterday (Monday) afternoon, up from Eu124.627bn a week previously. The Eu1.474bn increase compares with Eu1.824bn the previous week.

Only one euro benchmark, a Eu500m six year MünchenerHyp issue, settled last week, and with central banks having been allocated 48% of the deal analysts estimated that the Eurosystem bought on average some Eu247m of covered bonds a day in the secondary market. This represents a slowdown versus some Eu310m a day the previous week and compares with an average over the life of the programme of some Eu400m.

Analysts expect next week’s figure to reflect a substantial increase in buying on the back of a surge in new issuance. Jussi Harju, analyst at Barclays, said the CBPP3 portfolio is expected to grow by Eu3.3bn next week, based on the Eurosystem having bought around Eu2.1bn of six benchmarks totalling Eu4.75bn that settle this week and if it maintains secondary purchases at last week’s pace.

The asset-backed securities purchase programme (ABSPP) jumped from Eu13.394bn to Eu14.465bn in the week to last Friday, with the Eu1.071bn increase representing the biggest week’s increase yet, according to Joost Beaumont, senior fixed income strategist at ABN Amro.

“This likely reflects settled ABS deals in the primary market, but could also reflect the impact of the more direct approach of investors by the Eurosystem,” he said. “At Eu14.5bn, the programme remains relatively small, though.”

The public sector purchase programme (PSPP) meanwhile increased from Eu358.774bn to Eu370.816bn, with the Eu12.042bn increase slightly down on the previous week’s Eu12.459bn.

Photo: ECB stand at Sibos 2015 Singapore last week; Source: ECB/Flickr