Bonds: Gilts, US Treasuries get haven bid

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

US: 2.10% (-7bp)

UK: 1.77% (-7bp)

Germany: 0.59% (-6bp)

France: 1.0% (-5bp)

Italy: 1.75% (-5bp)

Spain: 1.93% (-11bp)

Greece: 8.23% (+2bp)

Japan: 0.36% (+3bp)

Gilts tracked a move higher in long-term US Treasury prices ahead of a raft of Fed speakers scheduled to speak throughout the following week and later on Monday afternoon.

That came despite remarks on Monday afternoon from the president of the Federal reserve bank of New York, William Dudley, who joined the chorus of US rate-setters who believe a rate hike is “likely” later in the year.

The presidents of the regional Fed banks of Chicago and San Francisco were due to speak later in the day.

Acting as a backdrop, most of the world's major equity indices registered sharp drops amid weakness in the price of copper and oil.

Going in the opposite direction, although markets appeared to shrug it off, the Centre for Economics and Business Research pushed back the date for its forecast of the first increase in Bank Rate to May or August 2016 rather than February, its previous prediction, due to signs of weakness in the global economy, especially China.

Not to be missed in the fray of Monday’s price action, independent strategist Ashraf Laidi warned of the risk for heightened volatility in US high-yield debt markets, especially in the energy space.

As regards the latest macroeconomic data releases, US personal incomes and spending expanded by 0.3% and 0.4% month-on-month in August, coming in slightly ahead of analysts’ projections once revisions are taken into account.

Spanish bonds outperformed after pro-independence in Catalonia’s regional elections on Sunday failed to muster a majority of the ballots cast. Nevertheless, they did obtain a majority of the seats in the regional assembly.

“Catalonia's regional election result is likely to sustain tension between the regional and central governments, Fitch Ratings says. The debate over independence could continue to strain co-operation between them, which would be credit negative for the Autonomous Community of Catalonia,” analysts at Fitch Rating said following the outcome.