German fixed income futures operate shy of....>

BUNDS: German fixed income futures operate shy of Friday's settlement levels as

we approach European hours. Schatz -1.0 tick, Bobls -4.0 ticks, Bunds -11 ticks.

- As a reminder, the space turned bid in the final session of last week.

Friday's soft German & French PMI data drove the initial leg higher, with the

curve flattening further as worries re: U.S. yield curve inversion intensified.

10-Year Bund yields subsequently closed in negative territory after breaching

the 0.0% threshold for the first time since 2016.

- Friday also saw BBG sources report that ECB President Draghi told EU officials

that the central bank observes a "protracted weakness and pervasive uncertainty"

in the European economy but no recession, which he suggested was largely

attributable to the international trade environment.

- Peripheral spreads widened on Friday on the back of the broader risk-off tone.

The failure of Fitch to upgrade Spain's credit rating may leave some room for

disappointment in early Bono trade this week.

- German IFO data headlines the local docket Monday, with ECB's Coeure & Costa

set to make addresses during the day.