UPDATE 1-ECB bond buy figures leave markets in dark on scale-up

* ECB purchases increase to almost 2 billion euros

* Purchases likely to be higher due to settlement delay

* Buying expected to remain well short of early levels

(adds detail, background, analyst quote)

By Marc Jones

FRANKFURT, Dec 6 (BestGrowthStock) – The European Central Bank’s
government bond purchases edged up last week, figures on Monday
showed, although whether its controversial programme has really
moved up a gear is unlikely to be clear until next week.

The ECB said it had bought 1.965 billion euros worth of
bonds in the week to Dec. 3, up from 1.348 billion the previous

It is its biggest weekly total since the end of June, taking
the programme’s overall tally to 69 billion euros, although the
amount is just a fraction of the 16.5 billion spent during the
first week of the programme back in May.

The figures may not give the full picture, however. The ECB
adds the caveat that the total may be higher than reported as
purchases take 2-3 days to be finalised.

Bond traders expect the actual total to be higher after
saying on Thursday and Friday that the ECB had stepped up its
buying. [ID:nLDE6B21HH]

The ECB added a line to its weekly statement stressing that,
with a few exceptions, transactions made between Wednesday 1 and
Friday 3 December were not reflected in the total. (Click
(ECB35: ) for details)

Nonetheless, barring a major surprise, analysts doubt the
scale of the purchases will have approached anything near what
they were at the start of the programme.

“At the end of the day the numbers are likely still to be
very small in comparison to the start of the programme,” said
Schroders economist Azad Zangana.

“We will have to wait and see what happens when the full
numbers are published next week.”

For a graph of bond purchases click:

For a graph of bond spreads click:

One bond trader, who asked to remain anonymous, told Reuters
on Monday that the ECB had asked traders not to report back to
the press whether the central bank was in the market on a daily

The ECB can buy government and corporate bonds under the
purchase programme but it has given no further details, such as
how much it could spend or how long it intends to buy for.

The purchases are the central bank’s contribution to a 750
billion euro EU/IMF rescue package hastily brought in at the
height of the debt crisis in May.

Most analysts believe it is concentrating its purchases
exclusively on euro zone debt trouble spots Ireland, Greece and

Buying has been erratic so far. Having spent 16.5 billion
euros in the first week, purchases slowed to a trickle by early
August. They then increased moderately in September as Irish and
Portuguese fears escalated, only to grind to a halt in October.

They also remain at the centre of an internal rift within
the ECB.

Influential policymaker Axel Weber recently voiced his
criticism, saying the purchases had not calmed debt markets as
intended and should be scrapped. [ID:nLDE69B266]

Speculation in the build-up to the ECB’s policy meeting last
Thursday was that the ECB could massively scale up its
purchases. ECB President Jean-Claude Trichet gave no hint in
that direction, however, saying only that it was “ongoing”.

The ECB publishes the amount of bonds it has purchased on a
weekly basis every Monday.

It said that as usual it will take one-week deposits from
banks on Tuesday to offset the inflationary impact of pumping
money into the financial system via its bond purchases.

(Reporting by Marc Jones; editing by Stephen Nisbet)

UPDATE 1-ECB bond buy figures leave markets in dark on scale-up