Bargain-hunting sent gilt prices rebounding as traders judged the previous session’s declines as overdone.

With money markets already pricing in two further interest rate rises by November, hawkish minutes from the Bank of England’s April meeting and an unexpectedly large pickup in average earnings had little effect on the trend.

June long gilt futures settled 36 ticks higher at 107.18, up more than 80 ticks from a contract low hit on Tuesday after data showed UK inflation accelerated unexpectedly in March to its highest in a decade.

Yields on benchmark ten-year gilts slipped three basis points to 5.03 per cent, having risen above 5.10 per cent the previous session to their highest since 2004.

Meanwhile, short sterling interest rate futures rose between one and five ticks, reclaiming about half the ground lost in the previous session.

In Europe, government bonds moved higher as traders took direction from weaker equity markets as the first-quarter earning season unfolded.

With no fresh data from either the eurozone or the United States, focus was on consolidating positions and the first-quarter earnings season. Both the US and big European stock markets were lower after mixed earnings news.

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