The US equity market closed off last week in positive territory as the US debt ceiling issue had finally reached a resolution.
The bill was passed by the Senate on Thursday last week, and President Biden signed the legislation to lift the debt ceiling on Saturday, avoiding defaults in federal government debts, with just two days to spare. The market reacted positively to the news as the S&P gained 1.83 per cent, and the Nasdaq increased by 2.04pc for the week.
Another piece of important information released last week was the US payroll reports for May. According to the US Bureau of Labor Statistics, payroll results were mixed.
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The total non-farm payroll employment increased by 339,000, with most of the job gains from "professional and business services, government, health care, construction, transportation and warehousing and social assistance".
The increase in jobs was higher than the 190,000 expected, combining with another 93,000 upward revisions for March and April employment figures, further indicating the US labour market remains in strong health.
On the other hand, the unemployment rate ticked up from 3.4pc to 3.7pc as per the May household survey, while the labour force participation rate remained unchanged at 62.6pc in May.
Average Hourly Earnings for non-farm payrolls increased by 0.3pc month-to-month and ran only at a 4pc annualised rate over the past three months, indicating an ease in wage growth.
In Australia, the RBA increased the cash rate by another 25 basis points, bringing the rate to 4.1pc. The RBA said while Australia has now passed its peak inflation, the current rate of 7pc is still too high due to a tight labour market and wage growth. Depending on the reaction from the level of household consumption, further rate hikes may be required in order to bring inflation back to its 2-3pc target range.
In other news, the release of the China Caixin Services Purchasing Managers' Index (PMI) indicates its best level since December 2020. The index increased from 56.4 to 57.1, beating the expected 55.2, indicating an unexpected rapid expansion of service activities in China.
In addition, Chinese regulators are considering providing further support to its property sector by reducing the down payment in some non-core neighbourhoods of major cities, lowering agent commissions on transactions, and further relaxing restrictions for residential purchases under the guidance of the State Council.
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