ECB’s Schnabel: Don’t Read Too Much into Weekly PEPP Purchase Data

15 March 2021

By David Barwick – FRANKFURT (Econostream) – European Central Bank Executive Board member Isabel Schnabel cautioned on Monday against reading too much into the weekly data published by the ECB on its pandemic emergency purchase programme (PEPP) purchases.

In a Twitter thread, Schnabel said that ‘[i]t may be misleading to infer from the weekly data how large monthly net purchases are likely to be. One reason is the varying number of trading days across months, which implies that identical monthly volumes may go along with different weekly volumes.’

The redemptions are another reason, she said, because holdings that mature, which typically reinvested in the month they mature, may not be reinvested in the same week they mature, especially when large.

‘High redemptions early in the month tend to go along with higher *net* purchases towards the end’, she wrote.

The conclusion, she wrote, was: ‘Do not read too much into weekly purchase data under the PEPP. An extrapolation from weekly data to overall monthly data may lead to misleading conclusions about our monthly purchase behaviour.’