The ECB bought Eu1.704bn of covered bonds at the start of CBPP3 last week, it said this (Monday) afternoon after earlier accidentally revealing the extent of its activity, while the primary market was quiet as AQR results were absorbed, with a couple of Italian offenders widening.

The European Central Bank had scheduled the first release of data on buying under its third covered bond purchase programme (CBPP3) for 1530 CET today. However, as reported by The CBR this morning, earlier in the day it emerged that the ECB had included figures relating to daily purchases in a file uploaded as part of its regular data provision – this was subsequently removed.

According to this file, holdings under CBPP3 were Eu511m last Wednesday (22 October), Eu1.112bn on Thursday, and Eu1.704bn on Friday. As there has been no benchmark covered bond issuance market participants have assumed that any ECB purchases to date have been in the secondary market, where Eurosystem central banks have been active. Secondary purchases settle two days later and have typically shown up in ECB data two days later, so the cumulative figures correspond to Eu511m of buying last Monday (20 October), Eu601m on Tuesday, and Eu592m on Wednesday.

In its official announcement at 1530 CET, the ECB confirmed that Eu1.704bn of purchases had been settled as of Friday. It had previously said that upon releasing this information it would be doing so on a weekly basis, on Mondays at the same time.

The total is at the top end of forecasts, although not beyond what was possible in light of activity reported by bankers last week, and well above what the ECB bought at the start of the previous two purchase programmes.

“It’s more than expected,” said a covered bond banker. “It matches with their ambition to do some sizeable volumes.”

Unlike CBPP1 (under which Eu60bn was bought) and CBPP2 (where some Eu16bn was bought versus Eu40bn earmarked for the scheme), the ECB has not set a target size for CBPP3, but has merely said that it will run for at least two years, and that some Eu600bn of outstanding covered bonds are eligible.

Market participants were quick to question the ECB’s ability to maintain such a pace.

“The interesting thing is whether they can keep up this speed,” said a syndicate official. “I doubt it. They have fished up all this zero yielding paper at the short end where there have been money market accounts willing to sell.”

“It’s not the final word on the impact the programme will have,” he added. “We haven’t seen a primary trade yet and that will be the most interesting part of the story. Then the impact will be revealed.”

However, the primary market remained quiet today, with syndicate officials saying the pipeline remains thin and no obvious Eurozone issuers eligible for CBPP3 on the cards.

“Today many are digesting what the AQR results mean,” said one. “There were no negative surprises and it is difficult to see it having an impact on covered bond spreads.”

A banker nevertheless reported that the two Italian banks that fared worst in the Comprehensive Assessment, Monte dei Paschi di Siena and Banca Carige, widened by 10bp and 5bp, respectively, this morning. Italian financial institutions were the main causes for concern in the ECB and European Banking Authority exercise.

Other benchmark covered bond issuers that were found to have had shortfalls at the end of 2013 have all taken the necessary action to satisfy the ECB.

The overall backdrop was described as favourable and supportive by bankers, who noted that Eurosystem buying has also continued.

“We have seen a few clips bougth by the central banks again today,” said one, “which really keeps spreads stable or slightly tighter.”