The ECB last week registered the highest gross CBPP3 purchases in a single week for almost a year, with the Eurosystem buying some EUR2bn of covered bonds, around two-thirds of which were purchased in a busy primary market. The share of CBPP3 in overall QE purchases hit its highest level since 2016.

According to figures released on Monday, settled and outstanding purchases under the third covered bond purchase programme increased EUR1.606bn in the week to last Friday, from EUR240.783bn to EUR242.389bn. Figures released yesterday (Tuesday) show that around EUR400m CBPP3 holdings matured last week, implying that gross purchases totalled around EUR2.006bn.

These are the highest gross purchases made in a single week under CBPP3 since the week commencing 30 January 2017 and are well above the 2017 average of EUR1.1bn per week. They compare with gross purchases of just EUR96m recorded in the previous week, although this figure relates to just two days of purchases, all made on the secondary market.

The share of net CBPP3 settlements in the overall week-on-week growth of the ECB’s asset purchase programme (APP) portfolio also hit its highest level since March 2016, at 16%, according to Florian Eichert, head of covered bond and SSA research at Crédit Agricole.

Purchases under the corporate sector purchase programme (CSPP), which have typically eclipsed covered bond purchases since CSPP was launched in June 2016, totalled EUR1.4bn last week.

Three CBBP3-eligible benchmark deals settled last week, amounting to EUR4bn of supply, of which analysts estimate the Eurosystem bought EUR1.5bn-EUR1.6bn. This would imply that secondary market purchases averaged EUR80m-EUR100m per day, which analysts noted was below the 2017 average of around EUR140m per day.