Asian shares rallied on Monday after U.S. and Chinese leaders brokered a truce in their trade conflict, a relief for the global economic outlook and a tonic for emerging markets and battered oil prices. China and the United States agreed to halt additional tariffs in a deal that keeps their trade war from escalating as the two sides try again to bridge their differences with fresh talks aimed at reaching a deal within 90 days. Many market players doubt the two countries can bridge their differences that cover a range of issues within three months and overall, there is still uncertainty over the outlook for corporate earnings amid signs of slowing growth.

In currencies, the dollar broadly weakened on Monday as investor demand for riskier assets rose after China and the United States agreed to a ceasefire in their trade war that has shaken global markets. The dollar had come under pressure last week when the market took comments by Fed Chairman Jerome Powell as hinting at a slower pace of rate hikes. Powell is scheduled to testify before a congressional Joint Economic Committee later this week. EURUSD gained 0.3 percent to $1.1350 amid heavy dollar selling, however, some analysts warned many issues still must be resolved for risk sentiment to stay positive. GBPUSD gained marginally versus the dollar to $1.2760. Sterling has posted losses for three consecutive weeks as traders bet that British Prime Minister Theresa May will not be able to pass her Brexit deal through Parliament on Dec. 11

In commodity markets, Oil prices soared by more than 4 percent on Monday after the United States and China agreed to a 90-day truce in their trade war, and ahead of a meeting this week by producer club OPEC that is expected to result in a supply cut, a positive start after it had posted its weakest month in more than 10 years in November, losing more than 20 percent as global supply outstripped demand. Speculation is high the Organization of the Petroleum Exporting Countries (OPEC) and Russia would agree some form of production cut at a meeting in Vienna.

Brent futures rose $2.40 to trade at $61.86 a barrel, while U.S. crude gained $2.28 to $53.21, both on course to make their biggest daily gains in over two years.