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28 May 2023

Debt ceiling deal (nearly) done

• US debt ceiling. An agreement to raise the ceiling looks to have been reached. It must now be voted on by both chambers of Congress.• Back to fundamentals. Removing a tail risk should see markets refocus on the policy outlook. US inflation is still too high. Another strong labour market report should be USD supportive.• AUD cross-currents. AUD found some support. Shift in relative interest rate expectations & softer global growth pulse likely to limit the AUD’s rebound. Markets ended last week on more positive footing, with equities rising (the US S&P500 rose 1.3% while the tech-focused NASDAQ outperformed...

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