Hang Seng 40

European stocks rose as the euro tumbled following Germany’s election result which was dubbed a "Nightmare Victory" for Merkel and could lead to potentially complicated coalition talks and perhaps even another early election. U.S. equity-index futures point to a lower open, while Asian equities slide after a plunge in Chinese property developer names over worries of new real estate curbs as well as tech stocks following more iPhone delivery concerns. S&P500 futures are steady, down slightly by just over -0.1%, after closing little changed on Friday.

S&P futures retreated along with European and Asian shares with tech, and Apple supplier shares leading the drop while safe havens such as gold and the yen rose, as the war of words between U.S. President Donald Trump and Kim Jong Un escalated and North Korea threatened to launch a hydrogen bomb, leading to a prompt return of geopolitical concerns. Trade focus now turns to a planned speech by Theresa May on Brexit (full preview here).

One day after the much anticipated Fed announcement in which Yellen unveiled the "Great Unwinding" of a decade of aggressive stimulus, it has been a mostly quiet session as the Fed's intentions had been widely telegraphed (besides the December rate hike which now appears assured), despite a spate of other central bank announcements, most notably out of Japan and Norway, both of which kept policy unchanged as expected.

The day has finally arrived: today the Fed will officially announce the start of its balance sheet shrinkage (full preview here) while keeping rates unchanged, perhaps hiking again in December (market odds at 56%), while revising its economic projections and "dots", most likely in a lower direction.

S&P futures are little changed as the Fed begins its two-day FOMC meeting pushing the VIX below 10, down 1.3% and falling for the 7th day; European shares are lower as is the dollar while Japanese stocks soar on the back of a tumbling yen as a snap election in Japan now appears imminent. Despite the cautious action ahead of the Fed, the The MSCI All-Country World Index rose 0.1% to a new record high.