Gilts
Ten-year gilt yields rose five basis points to 3.77 per cent after a surprisingly strong snapshot of the service sector fanned expectations that interest rates would rise sooner rather than later. Investors priced in about a 70 per cent chance that the Bank of England would lift the cost of borrowing in May. June gilt futures settled 35 ticks lower at 116.58.
Bet of the day
The pound made strides against the euro after the purchasing managers’ index for the services sector hit a 13-month high of 57.1 last month, surprising analysts. The news prompted spread-betters to buy sterling against the single currency in anticipation of further gains. Spreadex offers a spot price of €1.1458 to €1.1464 to the pound.
Tiddler to watch
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A month after agreeing to sell its drilling fluids business for £28.6 million, Rheochem has signed over 40 per cent of six North Sea blocks to PGS Exploration in return for an estimated £12 million of work helping the Norwegian oil and gas company to exploit them. Rheochem, valued at £39 million, rose a modest 1.4 per cent to 15.85p.