CPI day: peso breaks lower to 17.41 ahead of the print that defines the week
The Risk On index sums up global risk appetite — with a Mexico focus — in a single 0–100 number. Depending on where it lands, the day falls into one of these four bands:
The Risk On index is a proprietary indicator, designed and maintained by Mauricio Mercenario. It is a market-reading tool, not investment advice.
Good morning!
The day the whole tape was waiting for
We reach CPI Tuesday with the peso on the right side. USD/MXN trades at 17.4152, half a point lower, extending the pullback we flagged yesterday from the 17.64 area.
The market isn't waiting passively: gold jumps +2.52% and crude +3.11%, a combo that smells of hedging and reflation. S&P futures bounce +0.31% after the prior session's red. Today the data has the floor.
The peso leans on its rate premium
The Banxico–Fed differential stays nailed at 2.87pp, and that cushion is what keeps the peso resilient even as the S&P corrects. Realized vol on the pair at just 6.93% confirms there's no stress, only pre-print positioning.
My read: the bias favors the peso as long as the U.S. 10Y doesn't break 4.60%. Above that level I turn neutral, because that's where the differential starts to compress and the dollar regains appeal. Market opinion, not an instruction.
The curve exhales
The 10Y UST eases to 4.55% (-1.22%), with the long end giving ground while the 2s10s stays positive at 0.35pp. It's a curve pricing orderly disinflation, not recession.
The MOVE at 77.77 says the bond market still carries some nerves, but nothing extreme. Today's rates picture plays for carry: with no rebound in the long yield, the peso keeps its premium.
The scenario the print opens
Two clear paths. An in-line or soft CPI confirms the Fed is in no rush to move, compresses the long yield and leaves the peso pressing the 17.36 floor. A hot number wakes the dollar, shrinks the differential and reopens the tug-of-war with the 17.64 ceiling.
Beyond today, the ECB decision lands July 23, setting the tone for the euro and, by extension, the DXY. But that's another movie.
The Risk On Score drops from 63 to 61 and stays CONSTRUCTIVE: the structure holds, carry is the anchor, and the market is waiting, not fleeing. Today, the data defines the rest of the week.
— See you tomorrow for Wednesday's view.
Market return over the trading days after publication. For USD/MXN, negative = the peso appreciated. Automatic evaluation — not investment advice.
Index at the time of this note (2026-07-14) — the live value on the homepage may have changed.
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