The final month of CBPP3 buying looks set to leave net growth short of the past two months’ increases, with the portfolio falling EUR138m in the week to last Friday and overall APP purchases ceasing from today (Wednesday) until reinvestments are taken up again in January.

Settled and outstanding purchases under CBPP3 stood at EUR262.452bn on Friday, down EUR138m from EUR262.590bn a week earlier. Figures released yesterday (Tuesday) show EUR700m of the CBPP3 portfolio redeemed last week, meaning that gross purchases totalled around EUR562m – down from around EUR879m the previous week.

No CBPP3-eligible euro benchmarks settled last week, implying buying was all in the secondary market, at an average daily rate of around EUR112m – well down from the previous week’s EUR165m but not far off the average pace of the past two months during which the overall APP monthly target has been EUR15bn.

Around EUR1.441bn of gross buying settled in the first two weeks of the month, translating into a net increase of just EUR241m, and the ECB has said that it will stop APP purchases after today (Wednesday) “in anticipation of significantly lower market liquidity towards the end of the year, in order to reduce possible market distortions”, in line with its practice in previous holiday periods. However, with secondary buys settling two days later, the next, final CBPP3 weekly update should still take in a full five days’ activity, from last Thursday to today.

EUR1.137bn of CBPP3 redemptions were due this month and – based on the EUR500m and EUR700m redemption figures for the past two weeks (which are rounded to the nearest EUR100m) – these appear to have all occurred already, meaning that this week’s increase will reflect any gross buying in full.

However, for the ECB to maintain net monthly CBPP3 buying at the pace of the past two months – around EUR1.5bn – it would need to more than double its secondary market buying to around EUR250m per day – a pace not seen since April 2017.