The CBPP3 portfolio grew EUR642m in the week to last Friday, with an absence of primary market settlements and redemptions meaning that secondary purchases were at their highest level since June, and keeping the week’s gross buying close to those of the past fortnight.

Settled and outstanding purchases grew from EUR260.281bn a week previously to EUR260.923bn as of Friday, and the European Central Bank confirmed yesterday (Tuesday) that no redemptions of covered bonds in the CBPP3 portfolio occurred in the relevant reporting period.

With no eligible new issuance having settled last week, secondary buying therefore made up the whole of the EUR642m of gross purchases. This is the most the Eurosystem has bought in the secondary market in a week since June.

The past week’s total is equivalent to an average of EUR128m per day. This is only slightly higher than the past two weeks’ averages, of an estimated EUR122m the previous week and EUR112m the week before that.

Crédit Agricole analysts noted that this is the fifth week in which gross secondary settlements have averaged above EUR100m per day, compared with an average of EUR90m for all of 2018, and that the EUR128m is only just shy of the 2017 average of EUR138m.

“Thus, secondary settlements have not been impacted at all by the overall APP pace dropping by half,” they said. “The only thing that has changed is the primary market buying.

“To us, this already gives a good hint for 2019: primary buying will be the exception while secondary buying could continue almost unchanged compared to 2018 secondary gross buying.”

The week’s EUR642m of gross buying is lower than the past two weeks’ increases, of EUR710m and EUR701m, respectively, with primary settlements boosting the past fortnight’s totals. These are the first three weeks under the Eurosystem’s new monthly EUR15bn asset purchase programme (APP) target.