German PSPP purchases remain biased towards short end, average maturity to rise slightly in 2017

April’s QE figures indicated that the average maturity of German Public Sector Purchase Program (PSPP) purchases stayed the same in April at 4.7 years. Germany’s purchases are expected to remain biased towards the short end of the curve, but the average maturity is expected to rise slightly in 2017, stated Danske Bank in a research report.

Purchases in Ireland, Finland and Portugal continue to stray from the capita key, with purchases dropping slightly more in April at EUR 522 million, EUR 674 million and EUR 526 million respectively. The figures released on Tuesday are expected to be the run rate for the rest of this year.

QE purchases dropped as expected to EUR 62.6 billion in April as compared with EUR 80.2 billion in March. The reinvestment flow from redemptions is expected to attract attention.

“Italy will be the only country getting an extra boost in May, which we estimate to be around EUR1bn in addition to the 9.7bn”, added Danske Bank.