/EGBs-GILTS: European core FI is on....>

BOND SUMMARY: /EGBs-GILTS: European core FI is on the front foot to begin the

week as Iran-U.S. headlines over the weekend weigh on risk sentiment.

- An initial retracement in Bunds following a strong open gave way to renewed

strength as stocks sold off sharply; DAX down 1.6%, FTSE off 0.6%. 

- Spain Svcs/Comp PMI surprised to the upside, little reaction. Italy data next.

- Apart from that, final PMIs for Eurozone/UK later unlikely to move markets.

- The Epiphany holiday observed throughout much of Europe Monday means that

activity is likely to be thinned somewhat. Latest key levels:

* Mar Bund futures (RX) up 30 ticks at 172.42 (L: 172.24 / H: 172.6)

* Germany: The 2-Yr yield is down 1.2bps at -0.631%, 5-Yr is down 1.7bps at

-0.568%, 10-Yr is down 2.5bps at -0.303%, and 30-Yr is down 1.7bps at 0.234%.

* Mar Gilt futures (G) up 20 ticks at 132.43 (L: 132.33 / H: 132.62)

* UK: The 2-Yr yield is down 0.1bps at 0.552%, 5-Yr is down 0.4bps at 0.543%,

10-Yr is down 1.3bps at 0.725%, and 30-Yr is down 1.3bps at 1.208%.

* Mar BTP futures (IK) up 15 ticks at 143.43 (L: 143.34 / H: 143.66)

* Italy / German 10-Yr spread 0.3bps wider at 162.8bps.