* France, Italy well above capital key in April
* Germany in line after bumper March
* ECB says deviations aimed at "smooth implementation"
(Adds ECB comment, German numbers)
By Francesco Canepa
FRANKFURT, May 2 The European Central Bank
bought more French and Italian bonds than its own rules allow
last month, which probably helped keep financial markets calm in
the tense run-up to the first round of France's presidential
The ECB bought 11.3 billion euros of public-sector bonds
from France and 9.8 billion euros from Italy last month through
their national central banks, ECB data showed.
In both cases, that is more than a billion euros above the
amounts dictated by the ECB's own rules, which are roughly based
on the size of each country's economy, according to Reuters
Purchases of German bonds were in line with the country's
quota in April after climbing well above it in March, leading
some to speculate the ECB was having trouble finding eligible
German debt to buy.
An ECB spokesman said the ECB will continue to deviate from
the so called 'capital key' to ensure a "smooth implementation"
of the Public Sector Purchase Programme (PSPP).
"While the relative shares of monthly PSPP purchases will
also continue to be adjusted in the future, the direction of
adjustments cannot be anticipated," the spokesman said.
"These adjustments reflect the programme’s inbuilt
flexibility and our commitment to market neutrality with the aim
of a continued smooth implementation of the PSPP."
The ECB's 2.3 trillion-euro ($2.51 trillion) bond-buying
scheme has been widely credited for supporting markets in the
face of political uncertainty.
In France, the pro-euro presidential candidate Emmanuel
Macron won the first round of voting, beating eurosceptic Marine
Le Pen. Yields on French bonds, a gauge of how much France would
pay to borrow money, have fallen to multi-month lows.
Macron and Le Pen will meet in a run-off next weekend, with
Macron widely expected to win.
Italy, where elections will be held by May 2018, is
considered the next big political test for the future of the
Polls show the ruling Democratic Party has slipped behind
the anti-establishment 5-Star Movement, which questions the
country's euro membership.
The ECB is scheduled to buy bonds at least until the end of
the year. With inflation in the euro zone rebounding, it is
widely expected to start winding down the programme next year.
($1 = 0.9181 euros)
(Editing by Larry King)