Fra ABN Amro
ECB View: Shift to private sector programmes seems persistent – The weekly figures of the Euro system’s net asset purchases showed that the shift towards the private sector programmes persisted last week. In total, the central bank purchased EUR 4.3bn of bonds on a net basis last week, which was only half of the total amount of purchases during the week before last (which was the first full trading week after the restart of QE).
So far, the central bank has purchased EUR 13.4bn of bonds on a net basis, which leaves it well on track to service the EUR 40bn of net purchase-needs before it will take a break from 19 December onwards. The breakdown by type of programme showed that the shares of the covered bond purchase programme (CBPP3) and the corporate sector purchase programme (CSPP) were again significant, at 24% and 22%, respectively.
Meanwhile, the share of the public sector purchase programme was 46%. Compared to last week’s figures, the share of the CBPP3 increased (was 13%), while that of the CSPP (was 31%) and the PSPP (was 50%) decreased. The big picture so far is that the shares of the private sector programmes has risen substantially versus their average share in net asset purchases in 2018 (was 7.5% for CBPP3, and 15.4% for CSPP), while the share of the PSPP has dropped from 76% in 2018 to around 48% now.
It is still early days, but evidence is building that the ECB has shifted its focus for net asset purchases to the CBPP3 and CSPP and away from the PSPP. As already mentioned last week, this would provide strong support for these markets and suggests that the ECB is now more focused on easing credit conditions to the private sector directly. (Joost Beaumont)