Post-summer CBPP3 pick-up sustained into second week
The ECB last week registered an increase in gross CBPP3 purchases, with the Eurosystem buying some EUR659m of covered bonds. Purchases were therefore sustained at pre-summer levels for a second week, suggesting that September may see a rebound in month-on-month buying.
ECB figures released on Monday show the CBPP3 portfolio increased EUR459m, from EUR257.144bn to EUR257.603bn, in the week to last Friday. Figures released yesterday (Tuesday) afternoon show that around EUR200m of CBPP3 portfolio holdings matured last week, implying gross purchases of around EUR659m.
These are up from gross purchases of EUR507m in the previous week and are the highest weekly gross purchases since the week commencing 9 July. However, they remain below the 2018 weekly average of EUR895m.
In August monthly CBPP3 purchases fell to a record low amid the summer lull. However, buying is expected to rebound this month before another potential fall in October – when the ECB will lower its monthly QE target from EUR30bn to EUR15bn.
“Weekly gross purchases are now at levels similar to end of April and May,” said Joost Beaumont, senior fixed income strategist at ABN Amro. “This suggests that gross monthly purchases will rise back to levels seen pre-summer, which is around EUR 3bn-EUR4bn.”