World stocks hit a record high and the dollar climbs to an eight-week peak against the yen in a week in which the U.S. Federal Reserve is expected to announce a trimming of its balance sheet as part of a reversal of cheap money worldwide. Ciara Lee reports
They've been flocking to safe haven assets in recent weeks but Monday saw investors push world stocks to a record high The dollar reached an eight-week peak against the yen thanks to expectations that the U.S. Federal Reserve will this week announce a trimming of its balance sheet (SOUNDBITE) (English) BGC PARTNERS, MARKET STRATEGIST, MIKE INGRAM SAYING: "Various members of the Fed said that their policy over the next four years is going to be like watching paint dry. And actually they've been pretty much true to their word, and I'm not really expecting the dial to move very significantly on Wednesday. I think we may see a marginal shift in the Fed's dot pot going into 2018 - perhaps we might be looking in principle at a June rate hike, among three next year, as opposed to March." Investors also breathed a sigh of relief that the weekend passed with no new provocation by North Korea. Europe's main share index opened at a six-week high. And MSCI's broadest index of Asia-Pacific shares outside Japan rose to heights not seen in nearly ten years. (SOUNDBITE) (English) BGC PARTNERS, MARKET STRATEGIST, MIKE INGRAM SAYING: "I think a Trump tweet-free weekend is always welcome. I mean Tillerson is very keen to point out, all options remain on the table, and in fact that's I think that's quite right and proper otherwise what does a nuclear deterrent actually mean?" An address by Donald Trump to world leaders at the UN, and elections in Germany and New Zealand add extra political uncertainty to the mix this week. But the main event will be the Fed's meeting on Tuesday and Wednesday. Stubbornly subdued global inflation despite a pick-up in growth remains the "trillion dollar" question for central banks looking to normalise thir policies.