CBBP3 registered a doubling of gross purchases last week, with the Eurosystem buying some Eu1.229bn of covered bonds, having ramped up secondary market purchases, which rose to their highest level since April.

ECB figures released on Monday show that in the week to last Friday the CBPP3 portfolio grew Eu929m, from Eu228.023bn to Eu228.952bn. Portfolio redemption figures released on Tuesday afternoon show that some Eu300m of CBPP3 holdings matured last week, implying gross purchases of around Eu1.229bn.

This is almost double Eu612m the previous week and the highest since the week commencing 29 May, when gross purchases totalled Eu1.317bn (although a Eu1.224bn figure was registered for the week commencing 10 July and since the ECB typically rounds up redemptions to the nearest Eu100m precise conclusions are hard to draw). The average for weekly gross purchases this year is some Eu1.11bn.

One CBPP3-eligible benchmark settled last week, a Eu500m issue for Deutsche Pfandbriefbank, of which central banks and official institutions were allocated 29.1%. Analysts estimate the Eurosystem bought around Eu125m of the deal, implying that gross secondary market purchases averaged around Eu221m per day last week.

This is a marked increased from around Eu82m per day in the previous week and is the highest weekly secondary purchase figure since the week commencing 24 April.

“This is a very high number,” said Florian Eichert, head of covered bond and SSA research at Crédit Agricole, “and most likely shows investors happily selling shorter dated bonds to the CBPP3 to be able to move into the new issues we have seen recently.”