CBPP3 purchases totalling Eu721m settled last week, with secondary market purchases maintained at a steady level as only Eu250m of eligible Eurozone issuance settled, but analysts expect buying to pick up in the coming weeks following the reopening of the euro market.

European Central Bank figures released on Monday show that settled and outstanding purchases under the third covered bond purchase programme increased Eu321m, from Eu188.039bn to Eu188.360bn, in the week to last Friday.

Analysts noted this was the smallest net increase in the portfolio since the programme began, but portfolio redemption figures released yesterday (Tuesday) afternoon show that Eu400m of CBPP3-holdings matured last week, implying a gross increase of Eu721m.

This compares with a gross increase of Eu659m in the previous reporting period, when no CBPP3 holdings matured.

One CBPP3-eligible issue settled last week, a Eu250m Commerzbank tap of which analysts estimate the Eurosystem bought around Eu60m. This implies average secondary market purchases of around Eu132m per day, in line with the average of Eu132m per day in the previous reporting period.

Analysts said this was consistent with an expected slowdown in purchases in the summer period, with buying under the overall asset purchase programme (APP) expected to total around Eu65bn this month, after earlier frontloading.

CBPP3 buying is expected to increase in the coming weeks, after the euro covered bond market was reopened on Monday by the first new benchmark in a month, and with Eu2.75bn of eligible supply having been sold this week.

“Nevertheless, since end-July, CBPP3 purchases have only amounted to Eu1.7bn, meaning the volume of purchases in August is set to be even lower than that of July (Eu3.57bn),” said analysts at Société Générale.

Overall APP buying totalled Eu13.731bn last week, up from Eu13.277bn in the previous week, as purchases under the public sector purchase programme (PSPP) and the corporate sector purchase programme (CSPP) also increased slightly.