CPI ran hot — bonds shrugged it off

El CPI salió caliente en el titular, pero el mercado leyó las letras chicas y siguió de fiesta — toda la sesión se sintió como un "ya lo sabíamos".

The Data

May CPI came in at 4.2% year-over-year, the highest level in months. But that number is inflated by energy: it rose 3.9% on the month and accounted for more than 60% of the index's total increase. Core — what the Fed actually watches — came in at 2.9%, exactly in line, and the monthly print (0.2%) was even below the projected figure (0.3%).

The reaction confirms it: the MOVE fell to 77. If the bond market thought this changes anything for the Fed, the MOVE would be rising, not falling. The VIX edged up slightly to 20.5, but that move is explained more by the noise surrounding the data than by any real fear.

The Peso

USD/MXN moved from 17.48 to 17.38 on the day — more than half a percentage point, one of the most active sessions of the week for the pair. Even so, realized volatility remains at 6.9%, toward the low end of its historical range (7%–16%): the move is directional, not erratic.

The technical level in play is 17.25 — support from the 10-day range. The pair is already just cents away from there. As long as the DXY stays below 100, downward pressure on USD/MXN remains intact.

Index Reading

73 — moderate risk-on. The biggest drivers today are the weak dollar (DXY <100) and calm in bonds (MOVE 77); the only counterweight is the VIX, which rose but remains far from stress territory (>35).