GLOBAL MARKETS-Asian stocks, U.S. futures rise as debt ceiling deal ends

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GLOBAL MARKETS-Asian stocks, U.S. futures rise as debt ceiling deal ends

SYDNEY Reuters - Asian stocks and U.S. stock futures rose on Monday, buoyed by a weekend deal by President Joe Biden and congressional Republican Kevin McCarthy to discontinue the government's debt ceiling, ending a months-long stalemate and angst for investors.

After weeks of negotiations, McCarthy and Biden forged a deal late last Saturday to avert an economically destabilizing default to suspended the $31.4 trillion debt ceiling until 2025. The deal needs to pass through the narrowly divided Congress.

The positive news lifted the S&P 500 futures 0.4% in early trade and Nasdaq futures 0.6%. Nikkei rose 1.9% to a new 33-year high and Australia's resources-heavy shares rose 0.6%.

Asian markets should start the week on the front foot, but for the U.S. equity markets. Futures have opened stronger this morning, but we need to see the deal being passed for the next leg higher, said Tony Sycamore, a market analyst at IG.

No, we will get the relief rally in the short term but then we have to start thinking about the June FOMC meeting, about inflation being stickier than expected, and the money being drained out of the share markets. Cash U.S. Treasuries in Asia were untraded on Monday, owing to the Memorial Day holiday, while futures were generally steady. The expected yield for five-year futures was 3.84%.

On Friday, the Fed's preferred gauge of inflation - the PCE price index - came in stronger than anticipated, with markets now leaning towards a quarter-point hike from the Fed next month and seeing rates staying there for the rest of the year. On Friday, the lira topped 20.04 against the dollar, just a touch above its record low of 20.06 against the dollar, extending Turkey's increasingly authoritarian rule into a third decade.

Elsewhere in the currency markets, the dollar index - a measure of the greenback against its major peers - was solidly placed at 104.26, close to a two-month high on Friday.

The yen surged to a fresh six-month low of 140.89 per dollar in early trade, with the euro nursing losses above a two-month trough of $1.0721 and the Aussie hovered at $0.6527, just a touch above a six-month low hit on Friday.

Oil prices rose on the eve of the first trading day of the week. Brent crude futures rose 39 cents, or 0.5%, to $77.34 a barrel, while U.S. West Texas Intermediate crude was up 45 cents, or 0.6%, at $73.12 a barrel.

The value of gold remained at $1,943 down compared to the same period a year ago. 69 cents per ounce.