CBPP3 buying registered a fall in pace last week despite an increase in available Eurozone issuance, as secondary market purchases were once again below average, most likely reflecting difficulties the Eurosystem is experiencing in acquiring paper from investors, analysts suggested.

European Central Bank figures released on Monday afternoon show that settled and outstanding purchases under CBPP3 increased Eu649m, from Eu195.841bn to Eu196.490bn in the week to last Friday.

Portfolio redemption figures published yesterday (Tuesday) afternoon show that around Eu300m of CBPP3 holdings matured last week, implying gross purchases of around Eu949m. This compares with gross purchases of around Eu1.16bn in the previous week.

Some Eu1.75bn of CBPP3-eligible issuance settled last week, and analysts’ estimates analysts of the Eurosystem’s share ranged from Eu450m-Eu620m – implying average secondary market purchases of around Eu65m-Eu100m per day last week. This compares with an average of Eu146m per day in the previous week and, according to Crédit Agricole figures and estimates, in only three previous weeks (excluding New Year periods) have average daily secondary purchases been less than Eu100m.

Analysts said it was noteworthy that the pace of purchases fell despite there having been more CBPP3-eligible issuance settling last week than in the previous reporting period, when Eu1.5bn of benchmark Eurozone supply settled.

The limited secondary purchases probably reflect the ECB is finding it increasingly difficult to source bonds on the secondary market, suggested analysts, as alluded to by ECB governing council member Ewald Nowotny on Monday.

Market participants cautioned against interpreting Nowotny’s remark that the CBPP3 had reached “limits” as meaning that the programme will be cut short, particularly after ECB president Mario Draghi cooled speculation that asset purchase programme (APP) buying could soon be tapered, in a press conference last Thursday.

Most analysts expect the ECB to announce an extension of the APP beyond its earliest end-date (currently March 2017) in December. However, some said there would still be a case for the ECB to begin scaling back its QE purchases.

Analysts at Société Générale expect that the ECB’s target of Eu80bn of asset purchases per month will be lowered gradually from March 2017. They said such tapering would be justified given a reasonable growth outlook, core inflation forecasts and evidence of increased lending from banks.

“We argue there is no longer any reason for the ECB to maintain its monetary crisis policy,” they said.