The United States and Mexico agreed on Monday to overhaul the North American Free Trade Agreement (NAFTA), boosting optimism for an easing of global trade tensions.

The NAFTA agreement was signed in 1994 by the U.S., Canada and Mexico, eliminating most tariffs on trade between the three countries.

The agreement put pressure on Canada to agree to new terms and preserve a three-nation pact.

Global markets

Positive news from the U.S. and Mexico pushed Asian shares higher early on Tuesday on higher hopes of easing trade tensions.

MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.3 percent for a second straight day of gains.

“News of the US-Mexico trade deal has fuelled risk appetite,” analysts at ANZ said in a note to clients, according to a Reuters report.

“It is hard to extrapolate much out of it, as the United States continues to treat each country and deal on its own merit. We remain wary of the current rally in risk appetite, and see it as short-lived.”

The pan-European STOXX 600 closed 0.5 percent higher on Monday, as the U.S. S&P500 and Nasdaq added to gains.

 

Middle East markets

Stock markets in the Middle East mostly made gains on Monday, but trading volumes remained generally weak across the region afther the Eid holiday.

Saudi Arabia’s index rose 0.3 percent on Monday, adding gains for the second day in a row. National Commercial Bank jumped 3.0 percent and Savola added 2.6 percent. Jabal Omar Development Co also added 2.6 percent.

Dubai’s index edged up 0.1 percent as Emirates NBD added 2.4 percent and property developer Emaar inched up 0.2 percent, while Damac Properties fell 3.3 percent.

The Abu Dhabi index rose 0.6 percent, mainly due to a 2.5 percent increase in First Abu Dhabi Bank's shares and a 1.4 percent rise in the value of Union National Bank.

Qatar’s index added the most gains, rising 3.8 percent as some banking shares were recovering from losses incurred on concerns over their exposure to Turkey. Qatar National Bank jumped 6.1 percent and Qatar Commercial Bank added 3.5 percent.

Egypt’s index closed mainly flat, Kuwait’s index fell 0.8 percent, while Oman’s index added 0.3 percent and Bahrain’s index dropped 0.3 percent.

Oil prices

Oil prices rose early on Tuesday on supply disruptions and as an OPEC and non-OPEC monitoring committee found that participating members cut output in July by 9 percent.

International Brent crude oil futures were at $76.51 per barrel at 0037 GMT, up 30 cents, or 0.4 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were up 24 cents, or 0.4 percent, at $69.11 a barrel.

Currencies

The dollar was steady against a basket of six major currencies on Tuesday after two sessions of losses.

The index edged 0.05 percent higher to 94.834 as of 0135 GMT.

Most investors were cautious, as talks between the U.S. and China on trade ended with no significant outcome.

Precious metals

Gold prices were steady on Tuesday following a flat dollar.

Spot gold was steady at $1,211.31 an ounce at 0047 GMT.

 

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(Writing by Gerard Aoun; Editing by Michael Fahy)

(gerard.aoun@thomsonreuters.com)

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