Daily Brief — 2026-05-24

The global FX macro summary indicates a strong US dollar, with a dollar dominance percentage of 66.67. The Polymarket odds suggest a low probability of the Fed decreasing interest rates by 50+ bps or 25 bps after the June 2026 meeting, with probabilities of 0.55% and 1.05% respectively. This aligns with the current growth surprise regime in the US dollar, with the market pricing in a strong US economy and little expectation of a rate cut. The dominant cross-asset driver is the rate differential, particularly the 2-year rate difference between the US and Europe. However, the market is starting to consider broader macro factors, such as the 10-year yield and oil prices. One key risk to monitor is the potential for the market's expectations to be incorrect, leading to a shift in the dollar's dominance and a potential reversal of currency trends. The current FX impulse is driven by a combination of factors, including the strong US dollar and the market's expectations of the Fed's future actions.