French, Italian and Spanish bond yields are also dropping by more than five basis points as investors shun riskier assets and look for safer investments. In the UK, gilt yields are also lower, though to a slightly lesser degree. The benchmark 10-year gilt yield is down 4 basis points.

The euro strengthened and European stocks rose on Monday after European leaders agreed to draw up a Ukraine peace plan, while Wall Street stocks eased as U.S. President Donald Trump is expected to decide what tariffs to impose on Canada and Mexico early on Tuesday.

Shares in BAE Systems, Rheinmetall and Leonardo all added to strong gains this year on Monday amid expectations of rising European defense spending.