Peso steady at 17.46, carry intact as gold flags macro caution

Good morning!

Today's signal: constructive but not euphoric

Markets open this Thursday with a mixed read worth unpacking. S&P futures (ES +0.40%) are recovering part of the cash session's decline (-0.22%) while the VIX at 16.09 and MOVE at 68.56 confirm that implied volatility — in both equity and rates — remains compressed with no distress signals. Gold touching 4,153 (+2.07%) is the data point worth raising an eyebrow at: when the precious metal rallies hard while equity hesitates, the market is buying tail protection even without abandoning the core risk-on posture. Bitcoin at 61,444 (+2.40%) adds color to the risk appetite picture. The aggregate message: constructive, not complacent.

The peso and carry: the story holds

USD/MXN at 17.4554 pulls back 0.21% and stays comfortably within the technical range (support 17.2983 / resistance 17.6732). The DXY at 100.61 offers no meaningful bid for the dollar, and the Banxico-Fed spread of 2.87 percentage points (Banxico 6.50% vs. Fed 3.63%, TIIE28 at 6.89%) remains the peso's fundamental anchor. Realized USD/MXN vol at 7.75% is low by historical standards, which lowers the cost of holding carry positions. My market view: with the carry differential at these levels, the DXY lacking clear bullish catalysts, and realized vol contained, the bias favors the peso in the near term — though weak crude (WTI -1.82% at 67.33) is a latent risk that warrants close monitoring.

Rates and the curve: reading the steepening correctly

The UST curve shows a clear positive slope: 2Y at 4.14%, 10Y at 4.46% (up +2.13% today), 2s10s spread at +30bp. After months of inversion and normalization, a positive curve in this segment reflects the market stepping back from pricing aggressive long-run cuts and demanding term premium again. The 30Y at 4.91% reinforces that. For the peso, a controlled bear steepening — long rates rising but the Fed delivering no hawkish surprises — is manageable. The risk scenario would be an abrupt move in the 10Y through 4.60-4.70%, which could reignite broad dollar strength.

The path forward: Mexico's July 9 CPI is the key event

With today's session light on high-impact events, the next clear inflection point is Mexico's CPI inflation on July 9 (INEGI). Positioning will begin building this week. An upside surprise would leave Banxico with less room to accelerate cuts, keeping the carry differential elevated — positive for the peso. If inflation comes in softer than expected, the debate over a more aggressive easing cycle could erode part of the differential that currently underpins the MXN. On the global front, crude oil's direction and any signal from the Fed will continue to set the backdrop.

The Risk On Score today is 66/100 — CONSTRUCTIVE. VIX and MXN vol contribute the most solid points to the score; the carry differential and S&P movement add positive momentum, though without significant headroom. The environment supports maintaining peso exposure with open eyes — not running unhedged risk.

— See you tomorrow for Friday's view.