Bonds: Strong service sector PMI weighs on Gilts
These were the movements in some of the mostwidely-followed 10-year sovereign bond yields:
US: 2.88% (+2bp)
UK: 1.50% (+3bp)
Germany: 0.64% (-1bp)
France: 0.91% (-1bp)
Spain: 1.50% (-5bp)
Italy: 2.0% (+3bp)
Portugal: 1.95% (-4bp)
Greece: 4.36% (+1bp)
Japan: 0.04% (-3bp)
Bond yields diverged on either side of the Atlantic on Monday, although longer-term Gilts tracked their US peers, weighed down by a better-than-expected reading on UK services sector activity and a stronger pound.
IHS Markit's service sector purchasing managers' index for the UK advanced from a reading of 53.0 for January to 54.5 for last month, easily beating forecasts for a print of 53.3.
Similarly, the US ISM's rival services sector gauge came in at 59.5 for last month, which was ahead of the 59.0 that economists had penciled in.
Pushing the pound higher, in remarks to Parliament the Prime Minister said Westminster was getting closer to clinching an agreement on a post-Brexit transition period.
Worth noting, in a fairly upbeat note released earlier in the session, strategists at JP Morgan noted that while some activity indicators in the States had recently come down from lofty levels, others - such as initial weekly jobless claims or the ISM manufacturing PMI - had hit new cycle highs.
Also of interest, newly-appointed Federal Reserve governor Randal Quarles said officials were busy working to make "material changes" to the country's financial regulations.
"[...] Banks spend far too much time and energy contemplating whether particular transactions or positions are consistent with the Volcker rule," Quarles reportedly said.
Over in the euro area, the price action appeared to be all about safe-haven flows in the wake of the results of the Italian elections and ahead of the result of the European Central Bank's governing council meeting on Thursday.