The CBPP3 portfolio grew just €61m last week, with redemptions remaining at elevated levels and no eligible supply settling for the second consecutive week, although a mild pick-up in Eurozone issuance could feed into greater purchases over the next two weeks.

According to data released by the European Central Bank on Monday relating to settled and outstanding purchases under its various programmes, the CBPP3 portfolio grew €61m in the week to last Friday, versus a €1.011bn decrease the previous week. That contraction in the portfolio was on the back of around €2bn of redemptions, and these were €1.3bn last week.

The around €3.3bn of CBPP3 redemptions in the past two weeks are the highest recorded for any two week period since new net purchases resumed under the programme in November 2019.

Gross purchases of €1.361bn were up €372m from €989m the previous week. No CBPP3-eligible supply settled for the second consecutive week.

Joost Beaumont, senior fixed income strategist, ABN Amro, said the €1.361bn of gross CBPP3 purchases illustrates that the Eurosystem is apparently able to continue to source bonds in the secondary market in an absence of primary activity.

“The poor liquidity seems to be taken in its stride by the Eurosystem,” he said.

Any Eurosystem buying of a MMB SCF €500m 10 year issue settling today (Wednesday) will be included in next Monday’s CBPP3 figures – central banks and official institutions were allocated 10% of that deal. And assuming a €500m Bausparkasse Schwäbisch Hall transaction is launched as expected tomorrow (Thursday), at least €1.5bn of eligible supply will settle next week and gross CBPP3 purchases are expected to rise.

Aggregate APP and PEPP gross purchases settled last week were €28.994bn, up €9.1bn from €19.894bn the previous week, which marked the lowest weekly gross purchases since the summer lull. Aggregate redemptions across the two programmes were relatively high, at around €4.5bn, although less than the €4.8bn of the week prior.