CBPP3 buying registered a week-on-week fall of Eu270m, according to figures released this week, as purchases on the secondary market declined ahead of a potentially pivotal ECB meeting tomorrow (Thursday), at which a long-awaited tapering announcement is widely expected.

ECB figures released on Monday show the CBPP3 portfolio grew Eu921m, from Eu233.962bn to Eu234.883bn, in the week to last Friday. Redemption figures released yesterday (Tuesday) afternoon show that no CBPP3 holdings matured last week. Gross purchases were therefore down from Eu1.191bn in the previous week.

Analysts estimated that the Eurosystem bought Eu500m of covered bonds on the primary market last week, compared with Eu500m-Eu700m in the previous week. This implies secondary market purchases averaged around Eu84m per day last week, down from Eu98.2m-Eu138m in the previous week.

Tomorrow, the ECB is widely expected to announce an extension and tapering of its asset purchase programme (APP). Most analysts and market participants expect the programme will be extended until at least late 2018, beyond the current end date of at least the end of this year, with purchases reduced from Eu60bn per month to Eu20bn-Eu40bn per month. CBPP3 purchases are forecast to remain steady in the near term, having already decreased significantly over the course of the year.