The ECB last week registered a week-on-week near doubling of gross covered bond purchases, up to around EUR1.75bn, as purchases on the secondary market reached their highest level of the year so far, even though the focus remained on the primary market.

ECB figures released on Monday show that in the week to last Friday settled and outstanding purchases under the third covered bond purchase programme increased EUR1.356bn, from EUR244.708bn to EUR246.064bn. Figures released yesterday (Tuesday) show that around EUR400m of CBPP3 holdings matured last week, implying gross purchases of around EUR1.756bn.

This is up from gross purchases of around EUR900m in the previous week and well above the 2017 average of EUR1.1bn per week.

Last week EUR4bn of potentially CBPP3-eligible debt settled, although this includes a EUR500m deal for Alpha Bank in which the ECB did not participate on the primary market. The deal, which settled on Monday of last week, was structured to meet requirements to be eligible for the ECB’s covered bond purchase programme, but on the day of the pricing (25 January) the ECB had not given a verdict on the deal’s final eligibility.

Analysts estimate that around EUR900m-EUR1.2bn of last week’s gross purchases were on the primary market, compared with EUR600m in the previous week. This would imply that secondary market purchases averaged around EUR111m-EUR171m per day, the highest weekly secondary purchases of the year so far, up from an estimated EUR60m per day in the previous week.

“This reflects in our view the slowdown in new issuance, which has forced the central bank to shift focus on the secondary market,” said Joost Beaumont, senior fixed income strategist at ABN Amro. “This, in turn, reflects the practical approach of the Eurosystem.”

In January, the Eurosystem focussed on what was a very active primary market. Analysts inferred that around EUR4.8bn (77%) of the month’s EUR6.233bn gross purchases were made on the primary market.