ECB Asset Buying Slows to Weakest Under QE in Summer Lull

The European Central Bank’s asset purchases last month slowed to the weakest since quantitative easing started in March as liquidity dried up during Europe’s summer holiday period.

Holdings of government and agency debt, covered bonds and asset-backed securities rose by 51.6 billion euros ($57.6 billion) in August, the ECB said on Monday. The increase compares with 61 billion euros in July and 63 billion euros in each of May and June.

While the Frankfurt-based central bank intends to buy 60 billion euros a month of debt through September 2016 to revive euro-area inflation, it has repeatedly said the program can be adjusted to take account of market conditions. Purchases were frontloaded before the summer and ECB President Mario Draghi has signaled that the same strategy may be used before December.

In weekly data also published Monday, the ECB said holdings of public-sector debt rose by 11.9 billion euros in the period ended Sept. 4 to total 301.4 billion euros. Holdings under its current covered-bond program climbed by 1.1 billion euros to 112.2 billion euros. ABS holdings increased by 382 million euros to 11.5 billion euros.


Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.