Global equities advanced on Tuesday after a compromise deal to extend expiring U.S. tax cuts, though the euro zone's debt crisis and speculation over a possible interest rate rise in China kept them in check. The euro rose on optimism that Irish lawmakers will pass its toughest ever budget later in the day. The single currency remained vulnerable, however, with European policymakers dithering over how to tackle the region's debt problem.

Copper prices gained, supported by Chinese buying and a firmer euro, while uncertainties over monetary policy in China -- the world's second largest oil consumer -- weighed on crude prices.

U.S. President Barack Obama unveiled a deal late on Monday to renew tax cuts not just for the middle class but for also wealthier Americans, as Republicans wanted.

The announcement was welcomed by the markets, with U.S. stock index futures trading 0.2 to 0.3 percent higher and global stocks measured by MSCI All-Country World Index <.MIWD00000PUS> adding 0.3 percent. The market is benefiting from the compromise in the U.S. on the extension of the Bush tax cuts and to a lesser extent from the probable voting (through) of the Irish (budget), said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.

Europe's FTSEurofirst 300 <.FTEU3> index put on 0.2 percent and shares in euro zone peripheral economies also rose, while borrowing costs in those countries held steady.

The Irish benchmark <.ISEQ> gained 1 percent, as Prime Minister Brian Cowen is expected to get his fiscal plan through parliament and avert the risk of a snap election. Last month, the country accepted an 85 billion euro international bailout package.

The euro was up 0.4 percent at $1.3356.

The euro is gaining support on optimism that the Irish budget will be passed but I expect any rallies to be fleeting. Structural weaknesses in the euro zone remain in place, said Lee Hardman, currency analyst at BTM-UFJ.

EURO ZONE ON WATCH

The single currency region's policymakers have yet to show the financial markets that they can decisively resolve its debt problem.

After a five-hour meeting, the bloc's finance ministers said late on Monday they would be taking no new steps to tackle the contagion, saying an existing emergency fund was sufficiently big and that a proposal to issue euro zone bonds had not even been broached.

German Chancellor Angela Merkel, speaking in Berlin, rebuffed calls for a bigger financial safety net or joint euro bonds.

Yields on sovereign bonds issued by peripheral euro zone countries were largely steady. Ireland's 10-year bond yields over benchmark German Bunds eased 3 basis points to 563 bps, while those on Portuguese 10-year bonds rose 2 bps to 324 bps.

The dollar was steady at 82.66 yen after slipping to a three-week low against the Japanese currency earlier in the session. The renewed strength in the yen dragged Japan's Nikkei 225 <.N225> down 0.3 percent.

In the commodity market, copper rose 1.9 percent, while oil prices dipped 0.1 percent.

The euro has jumped a lot in the past few hours, and that has really lifted copper, a trader in Sydney said.

Also demand in China is very strong. We think they may be a little short and are moving to cover exposure. The two together could see us make a new high a little above the old levels before coming off again.

(Additional reporting by Atul Prakash, Neal Armstrong and William James in London, and Nick Trevethan in Singapore; Editing by John Stonestreet)

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