The pace of CBPP3 purchases did not increase in April, even as the Eurosystem surpassed its new Eu80bn monthly QE target, with PSPP picking up the slack. The CBPP3 portfolio, meanwhile, increased Eu1.239bn last week.

Starting from 1 April, the monthly target of the ECB’s asset purchase programme (APP) increased from Eu60bn to Eu80bn. Some market participants had said CBPP3 purchases could increase slightly from the Eu7bn-Eu8bn run-rate recorded in recent months, to make up for a shortfall before buying begins under a new corporate sector purchase programme (CSPP) towards the end of the second quarter.

ECB figures released yesterday (Monday) afternoon show the APP portfolio increased Eu85.164bn in April, with the CBPP3 portfolio increasing Eu6.614bn and the public sector purchase programme (PSPP) Eu78.499bn.

“This illustrates that the increased purchase efforts are primarily made up for by additional purchases in the public sector segment and has not resulted in a step-up of the purchases made under the CBPP3, or the ABSPP (asset-backed securities purchase programme) for that matter,” said Maureen Schuller, head of financials research at ING.

Month-end ECB figures show that the Eurosystem bought Eu4.848bn of covered bonds on the secondary market last month, and Eu1.766bn on the primary market. Schuller noted that the secondary market total is the highest since last August and the primary market total the lowest since then.

“This can be explained by the relatively modest Eu6bn in Eurozone primary debt settled last month, the lowest settlement amount since August last year and falling short of the Eu6.25bn settled in December last year,” Schuller said.

Separate ECB figures also released yesterday afternoon show that settled and outstanding purchases under the third covered bond purchase programme increased Eu1.239bn, from Eu171.014bn to Eu172.253bn, in the week to last Friday. In the previous reporting period, the portfolio grew Eu1.759bn, from Eu169.255bn.

One CBPP3-eligible deal settled last week, a Eu500m issue for HSH Nordbank, of which analysts estimated the Eurosystem bought around Eu140m. Assuming no redemptions, this implies average daily secondary market purchases of around Eu220m, down from around Eu280m in the previous reporting period.