Bonds: Investors seek out US Treasuries amid trade worries

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

US: 1.65% (-9bp)

UK: 0.49% (+1bp)

Germany: -0.59% (-2bp)

France: -0.29% (-2bp)

Spain: 0.23% (-3bp)

Italy: 1.70% (-10bp)

Portugal: 0.24% (-5bp)

Greece: 2.16% (+2bp)

Japan: -0.22% (holiday)

Investors were seeking out government debt on both sides of the Atlantic at the start of the week, especially US Treasuries, which pushed back towards multi-year highs amid the ongoing worries around the outlook for global trade and economic growth.

But not so in the UK, where markets were waiting on monthly employment and consumer price figures due out later in the week, leading traders in the pound and for Gilts to trim their bets on a further drop in Sterling and gains for Gilts until those reports were out of the way.

"The downward momentum in GBPUSD and GBPEUR is unmistakeable, but given the potential for (even small) upside surprises in this week’s UK data, latecomers to the party need to be careful," said IG's Chris Beauchamp.

"Talk of political paralysis would suggest the medium-term path is still down, but even a brief snap-back rally over the next few days could be dramatic."

Against that backdrop, Monday again saw big moves in Italian debt, albeit in the opposite direction from last Friday, as investors cheered debt rating agency Fitch's decision to keep its rating on the country's long-term debt at BBB, even if that was its lowest investment grade rank and that it came with a negative outlook attached, meaning that a downgrade was still possible in the short-term.

Fitch took that decision even after Matteo Salvini, riding high in opinion polls, had pulled the plug on his coalition government with the Five Star movement the day before.

If polls were proven correct, Salvini stood to become the next PM and possibly also gain a majority in both chambers of the country's parliament - which might allow him to change the country's voting system .

Similarly-dated Portuguese debt also did well, with the yield slipping by five basis points to 0.24% after Fitch raised its outlook on the Iberian country's sovereign debt from 'stable' to 'positive', possibly foreshadowing an upgrade.

Fitch also upgraded Russian Federation sovereign debt by one notch to BBB with a stable outlook.