The ECB registered a fall in its CBPP3 holdings of EUR258m last week on the back of the highest weekly redemptions yet seen under the programme, EUR1.5bn, even though gross purchases rose substantially on the back of increased issuance.

ECB figures released on Monday show the CBPP3 portfolio decreased EUR258m in the week to last Friday, from EUR254.633bn to EUR254.375bn. Figures released yesterday (Tuesday) afternoon show that some EUR1.5bn CBPP3 holdings matured last week – the largest week’s redemptions in the CBPP3 portfolio to date – implying gross purchases of around EUR1.242bn.

This is up from gross purchases of around EUR582m in the previous week and above the 2018 average of around EUR1.040bn.

“The weekly QE numbers of the Eurosystem suggest that the central bank is encountering difficulties in buying sufficient covered bonds in order to service the EUR30bn net QE asset purchases as well as to reinvest maturing principals,” said Joost Beaumont, senior fixed income strategist at ABN Amro.

Redemptions in the CBPP3 portfolio will in June be the highest for any month this year, at EUR3.202bn.

Five CBPP3-eligible benchmark deals and one CBPP3-eligible sub-benchmark settled last week, totalling EUR3.25bn of supply. Analysts estimated the Eurosystem bought around EUR590m-EUR700m of last week’s settlements on the primary market, implying that secondary market purchases averaged around EUR108m-EUR130m per day last week, compared with estimates of around EUR110m per day for the previous week.