Asian stocks mostly higher as US debt deal revives confidence

Asian stocks rose on Tuesday despite concerns over the mass of US government debt. MSCI’s broadest index of Asia-Pacific shares outside Japan rose by 0.4%, although the index is down 1.3% for the month so far. Longer-dated US Treasuries also rallied as bond traders became more optimistic about a US debt deal suspending Washington’s borrowing limit. The deal suspends the debt ceiling until January 2025 in exchange for spending caps and government programme cuts. Despite the positivity, investors are not certain of the economic outlook with the bond market implying a 70% probability of a US recession in the next year.