Investors traded nervously Tuesday as they kept an eye on Washington, where lawmakers are expected to vote this week on a deal to hike the US debt ceiling and avoid a painful default. President Joe Biden and House Speaker Kevin McCarthy hammered out an agreement at the weekend that saw both sides give ground, a week before a June 5 deadline when the government is expected to run out of cash to pay its bills. The news provided some much-needed relief to markets, but now the two leaders must convince waverers on both sides to back the deal, with the House expected to vote Wednesday followed by the Senate. Ultra-conservative Republicans feel McCarthy should have secured far deeper spending cuts in exchange for raising the debt ceiling and allowing the government to keep borrowing. The left wing of the Democratic Party is equally unhappy that Biden agreed to any spending limits at all. Still, the pair said they were confident. “I never say I’m confident what the Congress is going to do. But I feel very good about it,” Biden said Monday, adding that he had spoken to lawmakers. There were no catalysts from Wall Street owing to the Memorial Day break, and Asian markets were mixed Tuesday. Hong Kong and Shanghai edged up after recent losses fuelled by worries about the Chinese economy as the post-lockdown recovery fades, while there were also gains in Tokyo, Singapore, Seoul and Mumbai. But Sydney, Wellington, Taipei, Manila, Bangkok and Jakarta retreated. London edged down in the morning as dealers returned from a long weekend, while there were also losses in Paris but Frankfurt rose. “Voting on the US debt ceiling is expected to begin from Wednesday and there appears to be sufficient support to clear passage,” said National Australia Bank’s Tapas Strickland. However, analysts pointed out that while the debt ceiling resolution will remove one worry for markets, there is now a worry about liquidity that could weigh on sentiment. They said the Treasury will need to sell more than $1 trillion of Treasury bills to replenish its coffers, meaning a flood of sales that will soak up cash from the banking sector and put fresh pressure on the economy. Investors are also gearing up for the release of key US jobs data due Friday, with fears that a strong reading will put further pressure on the Federal Reserve to continue lifting interest rates as it struggles to rein in inflation. Last Friday showed the bank’s preferred measure of inflation — the personal consumption expenditures index — rose 4.4 percent year-on-year in April, up from 4.2 percent a month earlier. The core index, excluding volatile food and energy prices, also rose, as did personal income and spending. Win Thin, of Brown Brothers Harriman & Co, said: “We believe this deal cements a 25 basis point hike at the June 13-14 (policy) meeting. With banking sector stresses fading, a potential default was really the only thing that could have prevented a hike next month. “More importantly, rate cuts by year-end are now totally priced out, as they should have been long ago.”