Editor's Note: Below is a brief excerpt from today's Early Look written by our U.S. Macro Analyst Christian Drake. For the record, our analyst team made the contrarian #StrongDollar call ahead of consensus in early April. Click here to learn more.

We realized a discrete widening in monetary policy divergence this week alongside the combination of a hawkish FOMC and a dovish ECB/PBOC …. A reality reflected in FX yesterday with the Dollar having its best day against the Euro since Brexit.     

Moreover, 4 hikes are now largely priced in …. and 5 hikes in 2018 or a materially steeper trajectory for 2019 isn’t a high probability, particularly with both inflation and growth set to crest and roll domestically and spec short positioning in treasuries at all-time highs.

CHART OF THE DAY: (Still) Long Strong(er) Dollar - CoD Dollars   Divergences

CHART OF THE DAY: (Still) Long Strong(er) Dollar - early look