- Eurostoxx up 1.57%

- FTSE 100 up 1.56%

- Euro up 0.56 cents to 1.3638 USD

- Pound Sterling up 0.77 cents to 1.4542 USD

- Yields on German Ten Year Bunds up 2.5 bps to 3.00%

- Yields on UK Ten Year Gilts up 2.3 bps to 3.05%

The German, ten-year Bund was down 26.0 ticks to 124.34 with yields up 2.5 bps to 3.00%, while the 10-year gilt was down 32.0 ticks to 123.77 with yields up 2.3 bps to 3.05% following the euro zone trade balance and construction output reports from Eurostat. The euro was up 0.56 cents to 1.3638 USD.

Eurostat reported on Monday that the euro zone trade deficit grew to €10.5 billion in January, overshadowing the expected -€9.0 billion figure and adding to December's deficit of €1.7 billiion, revised up from a deficit reading of €700 million.

In seasonally adjusted terms, the trade deficit expanded to €5.5 billion to start off 2009, up from both the €1.9 billion deficit forecast and December's €1.7 billion deficit level. Meanwhile, December's figure was revised up from a deficit of €300 million previously announced.

Eurostat also reported that euro zone construction output rebounded 1.3% from December to January following the previous period's 2.8% decline.

On an annualized basisi, output in the construction sector fell 9.1%, up from December's 13.0% contraction. Meanwhile, December's figure was revised down from an initial estimate of -10.1%.

The five-year Bobl was down 15.5 ticks to 116.33, the two-year Schatz down 3.5 ticks to 108.09 and the September 2009 Euribor contract trading down 1.5 ticks to 98.62.

The spread between the 10-year Bund and 10-year U.S. Treasury notes narrowed 1.939 bps to -35.90.

UK 30-year bond yields were up 0.2 bps to 4.08%, five-year bond yields were up 1.3 bps to 2.26%, while yields on the two-year bond were down 1.9 bps to 1.32%.

The September 2009 Short Sterling contract was down 3.0 ticks to 98.47.

Yields on U.S. 10-year Treasury notes were up 0.5 bps to 2.640%.

European stock markets were gaining with the Eurostoxx up 27.77 points to 1793.44, the UK FTSE 100 up 59.82 points to 3902.7 and the German DAX up 66.47 points to 4135.21.

The Japanese Nikkei was trading up 269.57 points to 8215.53.

The Canadian dollar was up 0.37 cents to 0.8094 against the USD (1.2355 USD/CAD). Against the euro, the loonie was up 0.02 cents to 0.5935 (1.6851 CAD/EUR).

The U.S. dollar was up 0.50 to 96.46 and the euro was up 1.27 to 131.54, both against the yen.

The euro was up 0.56 cents to 1.3638 while the pound sterling was up 0.77 cents to 1.4542, both against the USD.

The euro was down 0.10 cents to 0.9379 pounds.

The Swiss franc was up 0.17 cents to 1.1257 against the USD and down 0.41 cents to 1.535 against the euro.

All data taken at 6:10 a.m. EDT.