Bunds have come weakened since..........>

EGB SUMMARY: Bunds have come weakened since mid-morning, with some initial core

EGB strength post-Italy bond auction reversing course, and some bond-negative

German data (regional CPI, retail sales, unemployment) being digested over the

course of the morning. Jun18 futures off 99 ticks to 161.81.

- The highly anticipated Italian BTP/CCTEU auction sold at the high end of the

indicated range of E6.0bln (E5.57bln sold), but the 10Y didn't sell at the max

of the E2.25bln range, and the tap was initially interpreted as poor, w 10-yr

Bund/BTP spread widening to 280.9bps vs 268bps prior to auction. However, the

spread then fell back to 259.7bps, 31.2bps tighter on the day.

- BTPs+Greece outperforming Spain+Portugal, part reversing Tue underperformance.

- Some more will-they-won't-they headlines from Rome, with Lega's Salvini again

calling for early elections following earlier news that Lega/5-Star were working

to form a government. Latest is that the two parties will not seek an electoral

alliance. More headlines inevitable today, though clarity hard to come by.

- Euribor futures are off Tuesday's highs but still elevated vs last week and

strip remains flatter. Blue contracts off 4.5-5.5 ticks with Whites steady.