The European Central Bank will from Friday frontload purchases under its asset purchase programme (APP), it announced this (Wednesday) morning, ahead of a suspension of buying over the year-end holiday period.

The public sector purchase programme (PSPP), third covered bond purchase programme (CBPP3), and asset-backed securities purchase programme (ABSPP) will be paused over two weeks, from 22 December to 1 January, inclusive, with buying resuming on 4 January. The ECB said that this is in anticipation of lower market liquidity during the period and to reduce possible market distortions.

“Moreover, purchases during the period 27 November to 21 December will be somewhat frontloaded to take advantage of the relatively better market conditions expected during the early part of the month,” said the central bank.

In minutes of the ECB’s September governing council meeting it was previously recorded that purchases under the overall programme would be “somewhat frontloaded” in the September to November period.

Frontloading and backloading of the overall programme occurred before and after the European summer holiday season, although a figure of Eu3bn per month cited by ECB president Mario Draghi – equivalent to 5% of the Eu60bn per month APP target – was deemed underwhelming by some market participants.

Ahead of the APP pause, the ECB is expected on 3 December to give details of an anticipated expansion of its quantitative easing.

ABSPP and CBPP3 were suspended for two weeks in the corresponding year-end period a year previously for the same reasons (PSPP had not yet been launched).