Bonds: Gilts underperform following regional election victory for Merkel

Longer-term Gilts underperformed at the start of the week on Monday following news of a surprisingly strong showing for the German Chancellor in a key regional election at the weekend.

Angela Merkel's CDU made off with 33% of the vote in the country's most populous state, against 31.2% for rival socialist party SPD.

Nevertheless, analysts at Barclays cautioned investors not to read too much into the results, saying: "history suggests that the NRW electoral outcome is not a reliable predictor of the national outcome, however."

To take note of as well, investors were expectant ahead of a meeting scheduled for Monday afternoon between Merkel and newly-elected French presidnet Emmanuele Macron, amid calls for the Eurozone's economic architecture to be revamped.

To take note of, late in the session data from the US Treasury Department revealed that China had increased its holdings of US government debt by the most in two years.

Chinese purchases of US debt across all maturities increased by $27.9bn in March to reach $1.09trn.