Bonds: Fed June decision will not be influenced by Brexit vote, Fed's Bullard says

These were the movements in the most widely followed sovereign bond yields:

US: 1.77% (+2bp)

UK: 1.48% (+7b)

Germany: 0.16% (+3bp)

France: 0.50% (+3bp)

Spain: 1.49% (-0bp)

Italy: 1.35% (+2bp)

Japan: -0.11% (+1bp)

Greece: 9.03% (+6bp)

Portugal: 3.13% (-4bp)

Sovereign bonds finished slightly lower almost across the board on Monday, amid a certain amount of volatility as an early morning plunge in oil prices drove safe haven demand, pushing prices higher, only to reverse late in the session.

The reversal in oil’s fortunes came as oil workers in Kuwait staged a walkout on Sunday, taking about 600,000 barrels of oil off the market, by some estimates.

Strategists at Citi and Danske Bank also weighed in with relatively upbeat views for oil prices going forward.

Gilts were easily the biggest underperformers as the Chancellor warned of the grave economic costs which Brexit would entail.

Should the UK only manage to negotiate a trade arrangement with the EU along the lines of that which exists with Canada by 2030 that would lop off 6.2 percentage points from the level of gross domestic product.

Acting as a backdrop, in an interview with the Financial Times, US St.Louis Fed chief James Bullard said weak tracking estimates for the rate of growth in the country’s gross domestic product over the first three months of the year were “somewhat concerning” which argued in favour of patience as the central bank moved to raise rates.

“We are on track to continue normalising this year, but it certainly gives us room for manoeuvre and we can be patient and go gradually,” Bullard said.

However, if the Fed did not raise rates in June it would not be due to the 23 referendum on the UK’s membership of the European Union, the policymaker said in that same interview.

“I would strenuously push back against the idea that we are going to sit on the sidelines because the UK is going to vote one way or another on that.”

The Fed cannot wait for everything to be “just right” before taking the best policy decision for America, he added.

To take note of, net short positions in futures on the 10-year Treasury note fell from a five-month high of 117.305 to 24,364 over the week ending on 12 April, according to the latest weekly data from the Commodity Futures Trading Commission.