The pace of CBPP3 purchases slowed to around Eu5.53bn in February after a “frantic” start to the year on the back of lower levels of eligible issuance, although the Eurosystem’s secondary market purchases increased slightly to compensate. Gross buying last week remained steady.

European Central Bank figures released on Monday show that the CBPP3 portfolio increased Eu4.33bn in February. Taking redemptions of around Eu1.2bn into account, gross purchases totalled around Eu5.53bn. This represents a slowdown from the Eu7bn purchased in January, which was the programme’s busiest month since March 2016.

“The decline mainly reflects the slowdown we saw in the primary market, which the central bank compensated partly by buying more covered bonds in the secondary market,” said Joost Beaumont, senior fixed income strategist at ABN Amro.

Analysts’ estimates for the secondary share of last month’s gross purchases ranged from Eu3bn-Eu3.7bn, up from around Eu2.3bn in January.

“As primary market issuance and hence CBPP3 settlements dropped after a frantic January, the CBPP3 used the volatile markets to increase secondary settlements, proving once more that stopping the programme is on no one’s mind,” said Florian Eichert, head of covered bond and SSA research at Crédit Agricole.

CBPP3 buying is expected to increase in March, given an expected increase in supply and higher redemptions.

In the week to last Friday, the CBPP3 portfolio increased Eu949m, from Eu212.188bn to Eu213.137bn. Portfolio redemption figures released yesterday (Tuesday) afternoon show that around Eu200m of CBPP3 holdings matured last week, implying gross purchases of around Eu1.149bn. This compares with gross purchases of around Eu908m in the previous week.

Two CBPP3-elgible benchmark covered bonds settled last week, totalling Eu1.5bn of which analysts estimate the Eurosystem purchased around Eu300m. This would imply average secondary market purchases of around Eu170m per day last week.

The governing council of the ECB will hold a monetary policy meeting tomorrow (Thursday), but no changes to the Asset Purchase Programme (APP) are expected.