Eurosystem covered bond purchases remained near record weekly lows last week as the ECB registered gross buying of EUR230m, representing a week-on-week increase of just EUR6m from the previous week’s all time low for a five day week.

ECB figures released on Monday show the CBPP3 portfolio increased EUR230m in the week to last Friday, from EUR256.882bn to EUR257.112bn. Figures released yesterday (Tuesday) afternoon show that no CBPP3 holdings matured last week.

Gross purchases were almost in line with the previous week’s EUR224m – which were the lowest recorded in a week under the CBPP3 programme, excluding weeks that relate to fewer than five full days of purchases due to seasonal suspensions in buying. Gross purchases remain well below the 2018 weekly average of EUR928m.

The sustained slump in buying came at the tail-end of the summer lull, as no CBPP3-eligible deals settled last week even though issuance has restarted.

Secondary market purchases therefore averaged EUR46m per day, marginally higher than the average of EUR44.8m per day in the previous week, which were the lowest weekly secondary market purchases since March.

The ECB is expected to register substantially higher gross purchases next week, as EUR1.75bn of CBPP3-eligible benchmark supply settles this week, following last week’s reopening of the euro covered bond market. However, net portfolio growth could be reined in by redemptions, as EUR475m of the portfolio is still due to redeem this month.