Voracious ECB to keep gobbling covered bonds

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By Bill Thornhill
19 Nov 2020

Limited supply prospects next year suggest that relentless purchases under the European Central Bank’s Covered Bond Purchase Programme (CBPP3) will continue to exert a strong influence on yields, squeezing more real money investors out of the market, even though its gross purchases may decline.

Analysts from DZ Bank and Deutsche Bank estimated that 2021 covered bond supply will be close to the €90bn seen this year. Credit Agricole analysts expect supply to top €100bn and those at Commerzbank see something in the region of €110bn.

That contrasts with the €130bn plus ...

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