Bonds gapped higher on the open as.....>

BOND SUMMARY: Bonds gapped higher on the open as concerns about the spread of

the coronavirus rocked global markets. After coming off of their highs in early

Asian trading, bonds moved higher once again following a disappointing German

IFO print. Treasuries have been the big outperformers.

- There have also been some significant moves in peripheral spreads. BTP-Bund

10y spreads are 16.9bp tighter versus Friday's close following the regional

election results over the weekend which saw turnout higher than expected after

the center-left PD managed to hold on to power in Emilia-Romagna. This is seen

as a positive development for markets and should reduce (although by no means

eliminate) political risk going forward.

- Elsewhere, GGB-Bund spreads are 12.9bp tighter on the day after Fitch upgraded

Greece's sovereign rating to BB with a positive outlook after markets had closed

on Friday.

- The market will remain vulnerable to coronovirus headlines throughout the day

while US new home sales are the only notable data release later today. This week

sees both the Fed and BoE meet.