CBPP3’s contribution to ECB QE remained steady in June and exceeded that of the new corporate sector purchase programme, while overall buying again exceeded the Eurosystem’s monthly Eu80bn target, possibly reflecting further front-loading ahead of an anticipated summer lull.

As of Friday, settled and outstanding purchases under CBPP3 stood at Eu183.570bn, up Eu582m from Eu182.988bn a week earlier. In the previous reporting period, the portfolio grew by a net Eu1.919bn.

However, analysts added that when a quarter-end amortisation adjustment of Eu530m is taken into account, settlements did not fall as substantially as the headline figures suggest.

Furthermore, redemptions in the CBPP3 portfolio last week are also expected to have an impact. Florian Eichert, head of covered bond and SSA research at Crédit Agricole, suggested that around Eu100m-Eu200m of CBPP3 holdings may have matured, noting that some Eu1.5bn of CBPP3-eligible issuance was redeemed last week.

“So, the Eurosystem was noticeably more active than the net number indicates,” said Eichert. “We are still talking about a slowdown in secondary buying but, at a gross level pre-redemptions of Eu222m per day and a likely gross number after redemptions of around Eu250m, the slowdown was nowhere near as material as net numbers indicate.”

The European Central Bank will publish last week’s redemption figures tomorrow (Wednesday).

While the CBPP3 portfolio grew by a net Eu5.6bn in June, Eichert suggested that the gross increase is around Eu7bn, up from Eu6.856bn in May and in line with the rate of purchases in previous months.

ECB figures released yesterday (Monday) afternoon show a net increase in the asset purchase programme (APP) portfolio in June of Eu85.1bn. Analysts noted this was the third consecutive month in which Eurosystem purchases exceeded its monthly target of Eu80bn by around Eu5bn, suggesting that purchases were being frontloaded ahead of the summer period, when liquidity typically dries up.

The ECB recently said that “the Eurosystem will continue to allow the actual monthly purchase volumes under the APP to reflect seasonal fluctuations in market liquidity, as was the case in 2015”, highlighting the summer and year-end periods.

As of the end of June (Thursday), the first month of the ECB’s corporate buying, the CSPP portfolio stood at Eu6.401bn. As of 1 July (Friday), the portfolio had grown to Eu6.798bn, up Eu1.9bn from the previous week.

However, only Eu241m (4%) of the June total was purchased on the primary market, and analysts noted that only four CSPP-eligible deals were sold last month. Analysts said the pace of purchases will likely increase when issuance picks up, and some forecast that total purchases under the programme will grow to more than Eu10bn per month.

They added such secondary purchases nonetheless represented an aggressive start, allowing for a decrease in the pace of public sector purchase programme (PSPP) buying. The PSPP portfolio grew Eu75.136bn last month, taking into account an amortisation adjustment of Eu3.064bn, down from Eu79.673bn in May.