The ECB last week registered the largest week on week growth in the CBPP3 portfolio since May, as for the first time in two months net settlements were not dragged down by portfolio redemptions. After record maturities in June, the burden is set to ease this month.

ECB figures released on Monday show the CBPP3 portfolio increased EUR647m in the week to last Friday, from EUR254.422bn to EUR255.069bn, the highest net increase since the week commencing 28 May.

Figures released on Tuesday show that no CBPP3 holdings matured last week, for the first time since the week commencing 7 May. Gross purchases were therefore down from around EUR1.125bn in the previous week and were well below the 2018 average of EUR1.013bn.

Last week is the second successive week in which the size of the CBPP3 portfolio increased, after two successive weeks in which it decreased on the back of heavy redemptions. Net CBPP3 settlements fell to their lowest of any month in the history of the programme in June, at EUR683m, on the back of redemptions that will be the highest of any month this year, at EUR3.202bn.

Redemptions in the CBPP3 portfolio will be lower this month, at EUR1.617bn, and bankers expect net settlements to rise closer to the 2018 average.

One CBPP3-eligible benchmark deal and one CBPP3-eligible sub-benchmark tap settled last week, totalling EUR1bn of supply of which analysts estimated the Eurosystem was allocated around EUR100m-EUR145m. This implies that secondary market purchases averaged around EUR100m-EUR109m last week, down from estimates of around EUR133m per day in the previous week.

Analysts expect CBPP3 primary market settlements to be much more significant in next week’s figure as EUR5.75bn of eligible issuance will settle this week.