Asian equities on Monday built on a global rally after a mixed US jobs report lifted hopes the Federal Reserve will hold off hiking interest rates this month.
On Thursday, Biden reiterated his pledge that "there will be no default" despite the wrangling, adding that talks with McCarthy, who leads the Republican negotiators, had been "productive".
All eyes are now on Washington, where President Joe Biden and House Speaker Kevin McCarthy have had a number of meetings to find a path to lifting the borrowing limit from the current $31.8 trillion.
Months of negotiations have failed to break the deadlock and lift the borrowing limit from the current $31.8 trillion, but things appear to be moving in the right direction after a series of Biden-McCarthy meetings.
Regional traders were provided a tepid lead from Wall Street, where disappointing retail sales data and weak earnings from Home Depot indicated softening consumer demand.
The Fed hinted at a possible pause in its long-running tightening cycle but observers warned that any sign inflation is creeping up would put pressure on officials to turn the screws further.
All three major US indices declined along with the dollar after the Fed's latest hike, while recession worries drove US oil prices below $70 a barrel, where they remained on Thursday.
Investors were also positioning themselves ahead of an expected US Federal Reserve rate hike on Wednesday, and one from the European Central Bank on Thursday.
Adding to investor uncertainty were raised fears about the banking sector after another US regional lender went under.
Fears of further turmoil in the banking sector, which had acted as a drag on global markets, also appeared to be dissipating as shares in troubled US lender First National Bank rose after two battering sessions.
Lacklustre US consumer data and mixed earnings reports fed those fears during trading hours, with US stocks in the red the entire day.
Investors were also spooked by earnings reports from US regional banks that pointed to a weakening profit outlook following sector turmoil last month that saw three lenders collapse.
The discussion comes as fears about the financial sector -- following turmoil last month that saw two US lenders go under -- have been tempered in recent weeks.
The closely watched report comes after a series of releases this week pointed to a softening of the labour market, suggesting Federal Reserve rate hikes over the past year are kicking in.
Crude held on to Monday's surge of more than six percent that came after top producers announced a surprise output cut, providing a fresh headache to central bankers as they battle inflation.
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.82% higher, while Japan's Nikkei advanced 0.49%.
A rollercoaster week was on course to end on a positive note after several Wall Street titans including JP Morgan, Bank of America and Citigroup stumped up $30 billion to deposit into troubled First Republic.
Investors piled back into stocks in U.S. markets overnight as fears about contagion in the banking sector following the collapse of Silicon Valley Bank (SVB) last week eased.
The collapse Friday of Silicon Valley Bank, which specialises in venture-capital financing largely in the tech sector, came after a huge run on deposits left it unable to stay afloat on its own.
Supporting the market on Wednesday, data from the American Petroleum Institute showed U.S. crude inventories fell by about 3.8 million barrels in the week ended March 3, according to market sources.
The long-running saga over prices, borrowing costs and recession speculation returned to the fore in US trading.
Oil prices were steady in Asian trade on Tuesday, supported by hopes a solid economic rebound in China will drive up fuel demand, offsetting worries about further U.S.
China has manufacturing surveys and the National People's Congress kicks off at the weekend and will see new economic policy targets and policies, as well as a reshuffling of government officials.
Oil prices inched lower in volatile trade on Monday, as a stronger dollar and fears of recession risks offset gains arising from Russia's plans to deepen oil supply cuts.
Investors in energy markets are weighing the prospects for China's reviving demand against tepid consumption in the United States and other advanced economies, analysts from Haitong Futures said.
A blockbuster jobs report and sticky inflation data this month have dealt a hammer blow to earlier expectations the US central bank could soon pause its monetary tightening campaign or even cut borrowing costs before year's end.
With Wall Street closed Monday for Presidents' Day there were few catalysts for regional investors, with focus on the release later in the week of minutes from the Federal Reserve's most recent policy meeting.
Data showed that the U.S. producer price index (PPI) rose 0.7% in January, after declining 0.2% in December.
MSCI's broadest index of Asia-Pacific shares sank 0.54% and was on course for a 1% weekly decline, after losing 1.16% in the previous week.
The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together called OPEC+, agreed on Sunday to stick to their October plan to cut output by 2 million barrels per day (bpd) from November through 2023.
