The Eurosystem did not materially step up CBPP3 purchases last week despite a Eu20bn increase in the ECB’s monthly QE target, according to analysts, with settled and outstanding purchases up Eu989m. However, one suggested buying could increase to more than Eu2bn per week later this month.

Starting from 1 April, the monthly target of the ECB’s asset purchase programme (APP) increased from Eu60bn to Eu80bn. Some analysts therefore expected CBPP3 purchases to increase slightly from its recent run-rate of Eu7bn-Eu8bn per month, to make up for a shortfall before buying begins under a new corporate sector purchase programme (CSPP) towards the end of the second quarter.

Figures released yesterday (Monday) afternoon show that settled and outstanding purchases under the third covered bond purchase programme increased Eu989m, from Eu165.843bn to Eu166.832bn, in the week to last Friday.

Only one CBPP3-eligible deal settled last week – a Eu500m issue for Banca Popolare di Sondrio, of which analysts estimated the Eurosystem purchased Eu100m-Eu120m. Assuming no redemptions, this implies average daily secondary market purchases of around Eu173m-Eu178m, which analysts noted was roughly in line with secondary market purchases in recent weeks – albeit more than in the previous reporting period, when the CBPP3 figure rose just Eu102m.

This low figure was attributed to quarter-end amortisation adjustments, a lack of issuance, and a shortened, four day trading week. Taking the amortisation into account, analysts said the actual increase was Eu605m, and estimated that average daily secondary market purchases were around Eu105m.

“Although the central bank did step up purchases of government bonds and SSAs, it kept its CBPP3 purchase policy rather constant,” said Joost Beaumont, senior fixed income strategist at ABN Amro.

The public sector purchase programme (PSPP) portfolio grew Eu18.819bn to Eu670.841bn last week, up from an amortisation-adjusted Eu11.415bn increase in the previous reporting period.

Maureen Schuller, head of financials research at ING, said that with three more weeks to go in April she expects weekly CBPP3 purchases of more than Eu2bn in order to reach total monthly purchases in excess of Eu7bn.

“Distributions of 36%-37% to the central bank and official institutions investor base for the Eu3.5bn in Eurozone benchmark debt to be settled this week suggest that, at least for the current week, that number should be achievable if secondary purchases are in the Eu0.73bn area or higher,” she added.