European Shares Set To Rally On US Debt Deal

European stocks are likely to open higher on Monday after U.S. lawmakers reached a deal to raise the nation’s debt limit and avert a potential default, following weeks of intense talks.

The bipartisan deal, a compromise between the Democratic and Republican leaders, now heads to Congress, which will need to pass the agreement before the government starts running out of money.

Asian markets traded mostly higher, with Chinese and Hong Kong stocks giving up early gains, on doubts about China’s economic recovery.

Data on Saturday showed that profit at China’s industrial firms fell 20.6 percent in the January-April period as companies struggled with both weak demand at home and softening demand in the country’s export markets.

U.S. markets will be closed today for Memorial Day holiday.

Gold prices were unchanged as the dollar held steady near a two-month high ahead of this week’s U.S. jobs report for May and the upcoming FOMC meeting in June.

Oil prices traded higher to extend Friday’s rally ahead of OPEC+ policy meeting on June 4.

U.S. stocks climbed on Friday after reports emerged that lawmakers are closing in on an agreement to raise the U.S. debt ceiling for about two years and avoid a catastrophic default.

In economic releases, inflation and consumer spending accelerated last month, bolstering the case for the Federal Reserve to continue monetary policy tightening.

The tech-heavy Nasdaq Composite and the S&P 500 jumped 2.2 percent and 1.3 percent, respectively to reach their best closing levels in nine months while the Dow gained 1 percent.

European stocks finished higher on Friday, with strong retail sales data from U.K. and the U.S. debt deal hopes helping underpin sentiment.

The pan European STOXX 600 rose 1.2 percent. The German DAX and France’s CAC 40 both jumped around 1.2 percent while the U.K.’s FTSE 100 added 0.7 percent.

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