Bonds: Government bonds find slight bid, Gilts outperform

These were the movements in some of the most widely-followed 10-year sovereign bond yields:

US: 2.74% (-1bp)

UK: 1.27% (-4bp)

Germany: 0.21% (+1bp)

France: 0.61% (+1bp)

Spain: 1.22% (-1bp)

Italy: 2.67% (+2bp)

Portugal: 1.65% (-0bp)

Greece: 4.06% (-3bp)

Japan: 0.00% (+1bp)

Longer-term Gilts outperformed at the start of the week, as investors sought out the relative safe haven of government debt ahead of the coming week's extraordinarily busy economic and corporate calendar.

That included a raft of key risk events, including trade talks between Washington and Beijing, a US central bank policy meeting, another key Brexit vote in the UK and key data releases in the US and China on Friday.

There was little in the way of fresh economic data to sift through on Monday, but what there was, figures on industrial profits in China and M3 money supply figures out of the euro area, underscored the prospect of weaker economic growth immediately ahead in both economic blocs, economists said.

However, judging from their comments, at least in China more stable growth was being anticipated.

On a more immediate note, and looking out to the following Friday, when key factory sector PMIs were due out in China and the US, Morgan Stanley described the US ISM print as "critical".

"Our US economics team expects a further fall in manufacturing PMI to 51.7. This print, which is still within the 50-55 range, would put us in a Goldilocks scenario for equities, while credit underperforms and bond yields fall," the investment bank told clients in a research note.

"We don't think that markets are priced for another huge downside surprise in PMI, with risks skewed unfavourably to the downside. Another sharp fall in PMI (below 50) would signal a new transition and challenge the recent risk rally."

Morgan Stanley also had something to say on the likely impact of the end of quantitative easing by the European Central Bank.

On its own, it would only have a small impact on the Eurozone's outlook, but in combination with quantitative tightening by the US Federal Reserve, it should be expected to curb annual Eurozone GDP growth by roughly 0.3 percentage points, although the impact on inflation will likely be muted, the investment bank said.