Goldman: ECB has bought up a fifth of Eurozone bonds

THE European Central Bank’s intervention in Eurozone sovereign bond markets means that the central bank amounts to 20 per cent of marketable stock, according to analysis by Goldman Sachs.

The note, released yesterday, says: “The ECB remains the main buyer of Portuguese government securities.” It adds: “The ECB has effectively removed from the private markets roughly the equivalent of the entire gross supply of Portuguese medium-to-long-term government bonds for 2010.”

The ECB is notoriously secretive about whose debt it is buying for fear of panicking bond markets if it is seen to intervene drastically.

However, it publishes weekly totals for its purchases, which show that it bought €165m (£138.7m) last week, the lowest level for several weeks due to the Christmas holiday. In the three weeks previously, it bought €1.12bn, €603m and €2.67bn.

Meanwhile, France held a long-dated debt auction yesterday, selling just shy of up to €9bn euros of 10, 15, and 20-year government bonds.

The sale saw decent demand but with yields rising since the previous sale.

“These auctions are doing well and it’s relatively important for the market psychologically because there was some concern at the end of last year, even for triple A paper,” said BNP Paribas rate strategist Patrick Jacq.

Figures showing the ECB’s purchases in the last week will be released on Monday.