EGBs-GILTS: Sharp Weakness Early

The space is under pressure early Wednesday, with Bunds and Gilts sharply weaker and periphery spreads widening as equities head lower.

• Futures across the board (BTP/Bund/Gilt) notably testing / pushing through the bottom of recent ranges, After spreads tightened Tuesday afternoon, we've seen a reversal higher in Wednesday's trade.
• UK CPI largely in line; RPI and PPI on the high side of expectations. Eye-popping Y/Y EU car registrations figure may be flattered by weak base (+218% Y/Y) but caught some attention.
• In supply, UK sells GBP2.5bln of Gilt, Germany E4bln of Bund, and EFSF E1bln. Finland syndication of E3bln 10-Yr (no-grow). Speakers include ECB's Panetta, Rehn, de Cos, and Lane.

Latest levels:

• Jun Bund futures (RX) down 49 ticks at 168.33 (L: 168.29 / H: 168.81)
• Jun Gilt futures (G) down 31 ticks at 127.18 (L: 127.12 / H: 127.4)
• Jun BTP futures (IK) down 72 ticks at 144.51 (L: 144.48 / H: 145.11)
• Italy / German 10-Yr spread 2.3bps wider at 123.4bps