The ECB registered a fall in gross CBPP3 purchases last week to EUR464m, their lowest level in a month. The portfolio could decline this week on the back of redemptions, but monthly growth for July should be nearer the 2018 average after a slump in June.

ECB figures released on Monday show the CBPP3 portfolio increased EUR464m in the week to last Friday, from EUR256.105bn to EUR256.569bn. Figures released yesterday (Tuesday) afternoon show no CBPP3 holdings matured last week.

Gross purchases were therefore slightly below the EUR583m purchased in the previous week – although in that week the portfolio shrunk EUR217m due to redemptions – and fell to their lowest since the week commencing 18 June.

Gross purchases remained well below the 2018 weekly average of EUR1.008bn.

One CBPP3-eligible benchmark deal settled last week, a EUR500m issue for Banco BPM. Analysts estimated the Eurosystem bought around EUR135m of Banco BPM’s deal, implying that secondary market purchases averaged around EUR65m per day last week, at the lower end of the recent range.

Analysts expect CBPP3 purchases to remain relatively low in the coming weeks amid the summer slowdown and a lack of supply. No CBPP3-eligible deals have been issued since Banco BPM’s deal on 18 July.

If gross purchases are maintained at around the current pace then the portfolio could be set for another net decrease this week. The ECB stated that EUR1.617bn of CBPP3 holdings would mature in July and only around EUR900m of those redemptions had taken place as of last Friday (27 June), implying some EUR700m of holdings matured on Monday and Tuesday of this week.

As of last Friday, the CBPP3 portfolio had grown EUR2.147bn in July. This is up from net portfolio growth of just EUR683m in June – a record low – and more in line with net purchases recorded in earlier months of this year.