Perceived safe havens like fixed income usually suffer when equities are en vogue, and a pause for breath on Wall Street Monday seemed favor sovereign debt prices earlier in the session. On Friday, U.S. equities had closed sharply higher amid a report that Deutsche Bank was near a settlement with the Justice Department. However, U.S.-listed shares traded 1.91 percent lower Monday with no official deal being announced between Deutsche Bank and the DOJ.
In economic news, the September Markit Manufacturing PMI came in at 51.5, a three-month low. "U.S. manufacturers signalled another moderate upturn in both production volumes and incoming new work during September, but the latest survey indicated a further loss of growth momentum from July's recent peak," Markit said.
The ISM Manufacturing index for September came in at 51.5, up from 49.4 in the previous month. Construction spending fell 0.7 percent in August, with analysts expecting a 0.2 percent increase.