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The yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 2.6757 percent, while the yield on the 30-year Treasury bond was also lower at 3.0219 percent.

The moves in pre-market trade come after fresh data out on Monday showed Chinese December exports and imports dropping unexpectedly. These figures deepened concerns of a slowdown in the world's second-largest economy.

At the same time, the divisions between Democrats and Republicans over a border wall continue, meaning there is no end in sight for the re-opening of the U.S. government. The longest ever shutdown in U.S. history is among the top worries for money managers.

China’s currency saw its biggest weekly surge since July 2005, and technical indicators suggest more gains are coming.

Buying momentum is the strongest in almost a year and options traders are turning bullish. A rising currency makes China’s financial markets more attractive to overseas investors -- foreign flows into the country’s debt surged in December -- which may further buttress gains.

Throw in a dovish Federal Reserve along with signs of progress in trade talks, and the sell-off of just a few months ago seems a distant memory.

·         China’s exports unexpectedly fell the most in two years in December and imports also contracted, pointing to further weakness in the world’s second-largest economy in 2019 and deteriorating global demand.

Adding to policymakers’ worries, data on Monday also showed China posted its biggest trade surplus with the United States on record in 2018, which could prompt President Donald Trump to turn up the heat on Beijing in their cantankerous trade dispute.

Softening demand in China is already being felt around the world, with slowing sales of goods ranging from iPhones to automobiles prompting profit warnings from the likes of Apple and Jaguar Land Rover.

The dismal December trade readings suggest China’s economy may have lost more momentum late in the year than earlier thought, despite a slew of growth boosting measures in recent months ranging from higher infrastructure spending to tax cuts.

Some analysts had already speculated that Beijing may have to speed up and intensify its policy easing and stimulus measures this year after factory activity shrank in December.

Exports in December unexpectedly fell 4.4 percent from a year earlier, with demand in most of its major markets weakening. Imports also saw a shock drop, falling 7.6 percent in their biggest decline since July 2016.

“Export growth dropped more than anticipated as global growth softened and the drag from U.S. tariffs intensified. Import growth also fell sharply in the face of cooling domestic demand. We expect both to remain weak in the coming quarters,” Capital Economics said in a note.

“Meanwhile, with policy easing unlikely to put a floor beneath domestic economic activity until the second half of this year, import growth is likely to remain subdued.”

·         Prime Minister Theresa May will make a statement to parliament at 3.30 p.m. BST before lawmakers continue their debate on her Brexit deal, Sky News reported on Monday.

Parliament is due to vote on Tuesday on whether to back May’s withdrawal deal from the European Union but it is expected that the agreement will be defeated.

Sky said May’s statement would focus on new assurances from the EU about the Irish backstop - an insurance policy to prevent the return of border controls between the British province of Northern Ireland and the Irish republic.

·         Tuesday's Brexit vote will not likely get enough support, former U.K. Prime Minister Gordon Brown told CNBC on Monday.

If the ruling Conservative government loses the vote, a no-confidence vote is likely, he continued.

"There is a long way to go and sadly, this is a prolonged period of uncertainty both for investors and the economy but also for the political system," Brown said.

·         British lawmakers are set to vote on Prime Minister Theresa May's much-maligned Brexit deal on Tuesday, with less than three months to go before the U.K. is set to leave the European Union.

Remarkably, May's template to exit the bloc faces virtually certain defeat.

That leaves the prospect of a complete collapse of government, a disorderly exit from the bloc or even the entire Brexit process being scrapped altogether over the coming weeks.

If the prime minister's deal is voted down on Tuesday evening, the government would only have three parliamentary working days to come up with revised plans.

Presently, the range of potential outcomes include: a May resignation, a vote of no confidence in the government, a general election, a second referendum on EU membership, a temporary stop on Britain's withdrawal, or possibly even some sort of combination of all the above.

"If anything, the events of the past two weeks suggest the distribution looks much more uniform," strategists at Nomura said in a research report published this week.

"In other words, high levels of uncertainty make all potential outcomes equally likely, including the tail risks of 'no deal' on the one hand, but remaining in the EU as the other."

·         Oil prices fell by 1 percent on Monday, with Brent crude slipping below $60 per barrel, after Chinese data showed weakening imports and exports in the world’s biggest trading nation and second-largest crude oil consumer.

International Brent crude oil futures were at $59.88 per barrel at 0816 GMT, down 60 cents, or 1 percent from their last close.

U.S. West Texas Intermediate (WTI) crude futures were down 59 cents, or 1.1 percent, at $51 a barrel.

Reference: Reuters, CNBC