GLOBAL MARKETS-U.S. fiscal cliff deal prompts broad market rally
* Global shares jump after U.S. Congress passes budget deal * Euro rises as U.S. dollar weakens as risk wanes * Oil jumps as commodities join rally in risky assets By Herbert Lash NEW YORK, Jan 2 (Reuters) - Global stock markets surged almost 2.0 percent and commodity prices rallied on Wednesday after U.S. legislators struck a deal to halt a round of automatic fiscal tightening that threatened to push the world's largest economy into recession. The deal reached on Tuesday to avert the "fiscal cliff" put off the immediate pain of tax hikes for almost all U.S. households but did nothing to resolve other political impasses on the budget that loom in coming months. Spending cuts of $109 billion in military and domestic programs were only delayed for two months. The deal boosted investors' appetite for riskier assets and depressed the U.S. dollar against major currencies. Brent crude oil hit an 11-week high of almost $113 per barrel and gold prices rose more than 1.0 percent to a two-week high. The vote in Congress removed a major uncertainty hanging over markets, but some analysts cautioned that the optimism could fade if U.S. economic data later this week disappoints. U.S. manufacturing expanded slightly in December, bouncing back from an unexpected contraction the prior month, according to an industry report released on Wednesday. "Many investors are feeling confident heading into 2013 following a year of strong equity market returns, and the recently signed deal," said Jonathan Golub, strategist at UBS in New York. "Unfortunately, our sense is that the most important structural issues will continue to be pushed off into the future, leaving significant uncertainty about the long-term direction of the economy and corporate profits." Wall Street's stocks surge followed strong equity gains in Europe and Asia. The Dow Jones industrial average was up 224.24 points, or 1.71 percent, at 13,328.38. The Standard & Poor's 500 Index was up 24.67 points, or 1.73 percent, at 1,450.86. The Nasdaq Composite Index was up 65.62 points, or 2.17 percent, at 3,085.13. The MSCI all-country world equity index rose 1.76 percent. The pan-European FTSEurofirst 300 rose 1.89 percent to 1,155.38. In currency markets, the euro hit $1.3299, the highest in two weeks and not far from an 8-1/2-month high set on Dec. 19. It was last at $1.3228, up 0.15 percent. The U.S. dollar fell 0.19 percent against a basket of major currencies. The dollar traditionally rises when markets sense risk and falls when tensions subside. It was a similar story for government debt, with prices of higher-yielding Spanish and Italian bonds higher and the German equivalent, usually favored by risk-averse investors, falling. The Bund future was on track for its biggest daily fall since September, down 1.6 points to 144.04. The benchmark 10-year U.S. Treasury note was down 23/32 in price to yield 1.8353 percent. Brent rose 85 cents to $111.96. U.S. crude rose $1.18 to $93 a barrel.