We explore the heart of financial markets and uncover essential trends through five crucial charts, shedding light on critical recent developments.

The dollar rallied to new cycle highs to start the week, with the DXY breaking above the 105.90 peak seen in March, while also poking its head above the psychologically key 106 handle. As the old adage goes, traders are ‘buying dollars, and wearing diamonds’. However, after ten straight weeks of gains, does the buck still have more left in the tank, or are the bears soon to seize control?

The ‘higher for longer’ policy message appeared to finally sink in for financial markets last week, amid a central bank bonanza which saw the FOMC leave policy unchanged, but indicate a more hawkish stance going forward, with tighter policy now seen in 2024. Elsewhere, the Riksbank and Norges Bank delivered the 25bp hikes markets had been expecting, while the Bank of England (BoE) and Swiss National Bank (SNB) surprised by keeping policy on hold. Unsurprisingly, the BoJ did nothing to tweak their ultra-easy stance. Looking ahead, a quieter calendar awaits this week, though as the dust settles on last week’s policy decisions, and with quarter-end flows in the mix, volatility continue to perk up.