The United States-Mexico-Canada Agreement (USMCA), agreed Sunday, replaces the North American Free Trade Agreement (NAFTA) -- which US President Donald Trump had threatened to cancel.
"Late last night ... we reached a wonderful new Trade Deal with Canada, to be added into the deal already reached with Mexico," Trump tweeted.
"It is a great deal for all three countries, solves the many deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, reduce Trade Barriers to the US and will bring all three Great Nations closer together in competition with the rest of the world.
"The USMCA is a historic transaction!" he added.
Frankfurt, London and Paris stocks advanced in reaction to the announcement.
The Canadian dollar leapt to a four-month pinnacle against the greenback at 1100 GMT, with the loonie at 1.2787 to one US dollar -- a level last seen in May.
"There's been a bright start to the week for equities," said XTB analyst David Cheetham.
"The main catalyst for these gains is the agreement reached late last night."
"The Canadian dollar has reacted positively to the news hitting a four-month high against the buck."
- Tokyo scales 27-year peak -
The news also helped send Tokyo stocks to a 27-year peak, but shares struggled elsewhere in Asian holiday trade.
Tokyo's leading Nikkei index closed at 24,245.76 -- the highest since November 1991 -- as traders shrugged off disappointing business confidence data and a weekend typhoon that hit the country.
Japanese equities also won support from the weaker yen against the dollar.
Analysts warned, however, that traders could be looking to take some cash off the table following recent healthy gains.
Markets in Hong Kong and China were shut for holidays.
Separately, the pound rose versus the dollar as British Prime Minister Theresa May gathered her ruling Conservative Party in the central city of Birmingham, facing an open revolt by former colleague Boris Johnson over her plans for Brexit.
Finance minister Philip Hammond on Monday blasted ex-foreign secretary Johnson in a fresh outbreak of infighting in the ruling Conservative camp.