CBPP3 registered a modest drop in purchases last week, the Eurosystem settling Eu1.206bn of covered bond purchases as primary buying fell on the back of lower issuance volumes, but secondary buying substantially higher.

European Central Bank figures released on Monday show that in the week to last Friday, the CBPP3 portfolio increased from Eu220.466bn to Eu221.672bn.

Portfolio redemption figures released yesterday (Tuesday) afternoon show that no CBPP3 holdings matured last week, implying gross purchases were the same as the net increase and were therefore slightly lower than the gross purchases of around Eu1.317bn in the previous week.

Two CBPP3-eligible benchmarks settled last week, a Eu1bn issue for OP Mortgage Bank and a Eu1bn deal for BPCE. Central banks and official institutions were allocated 45% and 35%, respectively.

Analysts estimated that the Eurosystem’s combined share of the two deals totalled around Eu650m. This would imply that secondary market purchases averaged around Eu111m per day, substantially higher than estimates of Eu23m-Eu63m for the previous week.

After an ECB governing council meeting last Thursday, president Mario Draghi announced no changes to the central bank’s QE programme, but the ECB did make its forward guidance on interest rates less dovish, as anticipated, in a move seen as a small step towards the end of its extraordinary measures.