The ECB’s secondary market covered bond purchases held steady last week as no eligible new issuance settled, according to analysts, while buying in the first full week of the new corporate sector purchase programme (CSPP) exceeded most market participants’ expectations.

Buying under the CSPP began on 8 June, and ECB figures released on Monday of last week showed that on the first day the Eurosystem purchased Eu348m of corporate bonds.

ECB figures released yesterday (Monday) afternoon show that under the first full week of the programme, the CSPP portfolio increased Eu1.9bn to Eu2.248bn in the week to last Friday.

Analysts noted this the pace of purchases was faster than many market participants had expected, and is equivalent to around Eu8bn per month.

“The numbers confirm that the ECB means business and could reach the Eu10bn monthly target we have spoken about before to hit a theoretical max holdings of Eu100bn,” said Quentin Gilletta, credit strategist at ING. “We still doubt whether this is feasible given market illiquidity and price action already on the back of the purchases.”

Prior to the launch of the programme, many market participants forecast that the CSPP would contribute Eu5bn-Eu10bn to the ECB’s monthly Eu80bn QE target. Some suggested this would allow for a reduction in CBPP3 buying.

Figures released yesterday show a net increase in settled and outstanding purchases under CBPP3 in the week to last Friday of Eu1.219bn, up from Eu179.85bn to Eu181.069bn.

ECB figures released on Monday of last week showed net CBPP3 portfolio growth of Eu1.491bn in the previous reporting period. However, figures released on Tuesday show that a record high of Eu700m of CBPP3 holdings matured in the week ending 10 June – implying a gross increase of Eu2.191bn. (Redemption figures for the purchase programme portfolios are released weekly, usually on Tuesday afternoons, and given to one decimal point.)

No CBPP3-eligible issuance settled last week – compared with around Eu800m-Eu950m of primary settlements in the previous reporting period, when Eu3.5bn of eligible issuance settled.

Assuming no redemptions, average daily secondary market purchases last week were therefore Eu244m, compared to an average of around Eu250m per day in the previous reporting period when the Eu700m of redemptions are taken into account.

“Despite large fluctuations in the published net numbers, essentially the CBPP3 has thus been going at a very steady and stable pace in secondary markets,” said Florian Eichert, head of covered bond and SSA research at Crédit Agricole.

Only Eu1bn of CBPP3-eligible covered bonds matured last week, according to Eichert, suggesting that the gross increase in the portfolio will be close to the net figure.

Buying under the public sector purchase programme (PSPP) meanwhile slowed last week, with settled and outstanding purchases increasing Eu16.917bn, compared with Eu17.733bn in the previous reporting period.

“As the CSPP managed to take around 10% of the overall settlements last week, the ABSPP managed to contribute and secondary CBPP3 settlements held steady, there was no need for a jump in the PSPP contribution,” added Eichert.