Shares rise on U.S. debt bill passage; Fed delays chatter. Global shares jumped Thursday as predictions for a U.S. rate hike. However, this month fell, and the House passed a debt ceiling suspension bill.

A divided House passed a package to suspend the $31.4 trillion debt ceiling and avoid a catastrophic default with majority backing from Democrats and Republicans, raising hopes that it can clear the Senate before the weekend.
After ending at a two-month low, the Euro STOXX 600 index (.STOXX) rebounded 0.8%. S&P 500 e-Mini futures rose 0.2%.

The U.S. law lifts the federal borrowing limit until January 1, 2025. After that, President Joe Biden and Congress can delay the politically dangerous topic until after the November 2024 presidential election.

“It’s very hard to believe this isn’t going to be even more of a formality in the Senate,” said National Australia Bank’s head of foreign exchange strategy Ray Attrill.
The 47-country MSCI world stock index (.MIWD00000PUS) gained 0.2%.

U.S. Federal Reserve officials, including governor and vice chair contender Philip Jefferson, hinted at a rate rise “skip” at the Fed’s June 13-14 policy meeting, boosting sentiment. The dollar dropped to a one-week low against the yen before adding 0.2%, as Treasury yields rose from nearly two-week lows.

“The market is also really focused on broad macro trends, such as central bank tapers,” said Unigestion portfolio manager Sandrine Perret. “We’re getting there.”

After hitting its lowest level since March 22 in the previous session, MSCI’s broadest Asia-Pacific share index (.MIAP00000PUS) rose as much as 0.8% before losing half of its gains.
In a rare sign of post-pandemic recovery, Chinese industry activity unexpectedly rose, lifting confidence. As a result, oil rebounded from four-week lows.

After unexpectedly strong jobs figures, money markets now give the Fed a 38% chance of hiking on June 14.

Later, Jefferson said postponing a rate hike in two weeks would give officials time to review more data. On Wednesday, Philadelphia Fed President Patrick Harker said he favors a rate hike “skip” for now.

The ADP survey and monthly non-farm payroll report are expected this week.

“It’s been a fairly strong retracement in terms of the market’s expectations for the June meeting, and it’s come contrary to the data,” said IG Markets analyst Tony Sycamore.

Before euro zone inflation statistics at 0900 GMT, the euro eased. It fell 0.2% to $1.06640, approaching Wednesday’s two-month low of $1.0635.

Benchmark 10-year U.S. Treasury rates rose to 3.6829% from 3.6140% overnight, the first drop since May 18