Asia stocks hit decade high, dollar firm before Fed meeting

Asian shares hit decade highs on Monday and the dollar held firm early in a week in which the U.S. Federal Reserve is likely to wrestle with its bloated balance sheet as part of a long reversal of super-cheap money worldwide.

There was relief the weekend passed with no new provocation by North Korea, though Pyongyang’s nuclear ambitions will be centre stage when U.S. President Donald Trump addresses world leaders at the United Nations on Tuesday. 

Some details of Trump’s tax plans may also emerge this week, while elections in Germany and New Zealand will add extra political uncertainty to the mix. 

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.9 percent to reach heights not visited since late 2007. Samsung Electronics (005930.KS) led the gains, along with healthcare and financial stocks. 

Australia's main index added 0.6 percent while Japan's Nikkei .N225 was closed for a holiday. E-Mini futures for the S&P 500 ESc1 rose 0.2 percent. 

For markets, this week’s main event will be the Fed’s policy meeting on Tuesday and Wednesday, where it is likely to take another step toward normalisation on what is rapidly becoming a global trend. 

Canada has already hiked twice in recent months and the Bank of England shocked many last week by flagging its own coming increases.

Yields on U.S. 10-year Treasuries US10YT=RR jumped a hefty 14 basis points last week, but still trailed the UK where yields on 10-year paper GB10YT=RR surged 30 basis points.