CBPP3 purchases increased slightly last week, but portfolio growth of Eu1.742bn was dwarfed by Eu19.766bn of PSPP purchases, the second highest week’s total, and analysts said public sector purchases are continuing to drive the Eurosystem’s progress towards its new monthly Eu80bn target.

European Central Bank figures released yesterday (Monday) afternoon show that settled and outstanding purchases under the third covered bond purchase programme increased from Eu172.253bn to Eu173.995bn in the week to last Friday. In the previous reporting period, the portfolio grew Eu1.239bn.

One CBPP3-eligible deal settled last week, a Eu1bn issue for CFF, of which analysts estimated the Eurosystem bought around Eu210m. Assuming no redemptions, this implies average daily secondary market purchases of around Eu300m, up from around Eu220m in the previous reporting period.

Meanwhile, the public sector purchase programme (PSPP) portfolio grew Eu19.766bn last week, from Eu726.521bn to Eu746.287bn.

Analysts at Citi noted that this is the second highest weekly purchases since PSPP buying began, and suggested that this could lead to the Eurosystem surpassing its Eu80bn target for May, as it did in April, when APP purchases totalled Eu85.164bn.

“For CBPP3, each new weekly reported volume points to further lower monthly purchase equilibrium – now down to around Eu7bn for 2016,” the analysts added.