Getting 2013 off to a good start.
Following on from Asia, European markets rose in the first trading session of the year after U.S. politicians approved a deal preventing massive tax hikes and spending cuts.
Even though the last-minute deal to avoid the "fiscal cliff" wasn't as far-reaching as the markets had wanted, it raised investors' hopes for a brighter outlook.
Market Strategist David Buik says this is purely a relief rally - and won't last.
SOUNDBITE: David Buik, Chief Market Strategist, Cantor Index, saying (English):
"It is a fudge deal, and I think anybody that thinks it is anything else probably deludes themselves. I think we are going to hit problems again come February when President Obama presents his budget for 2014 and clearly one of the issues in that is going to be the debt ceiling and the budget deficit, which at $16.4 trillion is wholly unacceptable."
As stocks rose, the dollar fell against a basket of currencies, just like German government debt, traditionally seen as a safe haven for investors.
On the contrary, the price of Spanish and Italian bonds rose.
Even as Europe continues to struggle with its debt crisis, Frankfurt trader Fidel Helmer says the U.S. could follow its lead on saving money.
SOUNDBITE: Fidel Helmer, Capital markets analyst at Hauck and Aufhauser Bank, saying (German):
"American politicians apparently haven't learned anything from the financial and economic crisis. They're not prepared to save, they only want to raise taxes within certain limits. And that's the complete opposite of the measures in Europe. We're economising here, and we're on the right track."
The slow response of American politicians also provoked criticism from an unlikely source - China.
Its official Xinhua news agency called on the U.S. to live up to its global economic responsibilities and put political rows to one side.
Europe's politicians have also been accused of kicking the can down the road in the past year, and the global spotlight may shine again on Europe.
Steven Saywell is from BNP Paribas.
SOUNDBITE: Steven Saywell, Global Head of FX Strategy, BNP Paribas, saying (English):
"Certainly six months ago we were nervous about tail risk, Greece leaving, potentially even break- up of the euro zone, that is now not a risk. I think the problem in the euro zone is low growth, and that's going to be with us for some time."
Despite the U.S. agreement, 2013 is shaping up to be a year when politicians on both sides of the Atlantic will have to tackle sluggish growth as well as cutting their budget deficits.
