The CBPP3 portfolio grew EUR1.464bn in November, almost the same as in October, but fell slightly last week on the back high of redemptions. Front-loading of purchases in the final month of APP could provide support to spreads, according to one analyst.

In November settled and outstanding purchases rose from EUR260.747bn to EUR262.211bn, with the EUR1.464bn net increase only marginally below the EUR1.477bn growth of October. Gross purchases were lower than in the previous month, at some EUR2.4bn.

The portfolio shrank EUR218m in the week to last Friday (30 November), falling from EUR262.429bn a week earlier. ECB figures released today show that there were some EUR700m of redemptions in the CBPP3 portfolio last week, meaning that gross buying was around EUR482m.

Crédit Agricole analysts estimated the Eurosystem took an aggregate of around EUR100m of the two new CBPP3-eligible benchmarks that settled last week, implying that secondary market buying was EUR300m-EUR400m – similar to the previous week.

They that anticipate some EUR900m of EUR1.137bn of scheduled December redemptions will occur this week, but that only around EUR50m of primary market purchases will settle, meaning that next week’s net number could be “a rather low print”.

However, Joost Beaumont, senior fixed income strategist at ABN Amro, suggested the Eurosystem could frontload purchases in the first three weeks of the month before the seasonal break – as it has done in previous years – to help it meet its overall EUR15bn monthly APP target. He pointed out that it would need to hit gross purchases of EUR2.6bn, given the redemption schedule, to keep net covered bond purchases similar to the past two months.

“If true, this would imply that the central bank needs to be rather active, especially in the secondary market (as new issuance tends to be subdued in December),” said Beaumont. “This could limit any further spread widening in coming weeks.”