Asia markets set to begin Christmas week higher; Nissan-Honda merger deal in focus

Asia-Pacific markets were set to start the holiday-shortened Christmas week on a positive note, after a U.S. government shutdown was averted over the weekend.

On Monday, investors will be looking out for any official announcement related to the merger of Japanese automakers Honda Motor and Nissan Motor. Japanese media outlet Jiji Press has reported that the announcement could come as early as Monday.

This comes after Nissan shares saw a record surge last Wednesday, following a media report that the struggling Japanese automaker was looking to merge with Honda.

Japan's Nikkei 225 is set to rise, with the futures contract in Chicago at 39,155 and its counterpart in Osaka at 39,070 against the index's last close of 38,701.9.

Futures for Hong Kong's Hang Seng index stood at 19,886, pointing to a stronger open compared to the HSI's close of 19,720.7.

Australia's S&P/ASX 200 started the day up 0.62%.

Last Friday in the U.S., all three major indexes climbed, helped by cooler-than-expected inflation data.

The Dow Jones Industrial Average gained 1.18%, while the S&P 500 added 1.09% and the tech-heavy Nasdaq Composite advanced 1.03%.

The personal consumption expenditures price index, the Fed's preferred inflation gauge, accelerated to 2.4% in November from 2.3% the previous month, but was still lower than the 2.5% estimate from Dow Jones.

Excluding food and energy, core PCE rose 2.8% from a year ago, slightly below expectations of 2.9%.

— CNBC's Brian Evans, Sean Conlon and Jeff Cox contributed to this report.