Bonds: Gilts gain amid Brexit jitters, sharp losses for the pound

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

UK: 1.39% (-2bp)

US: 1.76% (+1bp)

Germany: 0.18% (-3bp)

France: 0.52% (-4bp)

Spain: 1.65% (-5bp)

Italy: 1.52% (-5bp)

Japan: -0.1% (-2bp)

Greece: 10.59% (+5bp)

Portugal: 3.45% (+1bp)

Gilts gained alongside their euro area peers amid heightened Brexit worries sparked by Borish Johnson´s unexpected support for the 'Leave' campaign and amid weak economic data out of the Eurozone.

On Saturday, after the details of his new settlement with Brussels were unveiled, Prime Minister David Cameron told Britons a referendum would be held on the UK´s continued membership of the European Union.

However, in an unexpected turn of events on the following day London Mayor Boris Johnson threw his hat in the ring with those calling for the country to exit the European club of nations.

In a lively speech in the House of Commons, the Prime Minister chided Johnson for his apparent suggestion that a vote to leave might be followed by a second referendum further in the future, in a bid to clinch a better deal with the EU.

Most analysts still appeared to be expecting the 'Remain' camp to win the vote, thanks to Cameron´s campaigning for it but the risks did appear to increase.

Certainly, the pound saw its largest one day drop since 2009 on the back of the goings-on over the weekend.

In Europe, and on the data front, Markit’s 'flash' Eurozone PMI composite output index for February came in at 52.7 compared with 53.6 for the previous month.

This was below consensus expectations for a reading of 53.3 and marked a 13-month low.

"Overall, today’s PMIs suggest that weak global demand is becoming a drag on euro area confidence, with our PMI-based GDP indicator standing at +0.3% q/q, below our 0.5% q/q forecast. Together with continued deflationary pressures and the bleak inflation outlook, today’s data reinforce our view that the ECB will be forced to act at the March 10 meeting," Barclays´s Apolline Menut said in a research note sent to clients.

Another PMI from Markit, for the manufacturing in the States this time, released in the afternoon, revealed a fall from a reading of 52.4 for January to 51.0 for February- its weakest print in over three years.

Small losses in two-year US Treasuries were linked by some market commentary to the extended rally in crude oil prices.

Out in the corporate space, Vodafone sold €6bn in debt with maturities spanning from three to ten-and-a-half years, the largest deal in euro year-to-date.