Soft CPI drags USD/MXN to 17.39, flirting with the 17.36 floor
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 print that vindicated the positioning
Yesterday we flagged the market leaning into disinflation, and June CPI confirmed it without ambiguity: -0.4% month-over-month against a consensus of barely -0.1%. Core came in flat versus an expected +0.2%.
The story is in energy: gasoline collapsed 9.7% on the month, the sharpest drop since April 2020. Year-over-year, headline eases to 3.5% and core to 2.6%.
The market digested it fast: the odds of the Fed holding jumped to 86% and the scenario of a September hike cooled from 75% to 63%. Dovish, no caveats.
The peso collects its premium
Against that backdrop, USD/MXN opens at 17.39 and presses the support we'd been tracking. The Banxico-Fed rate gap at 2.87pp still pays to stand on the peso side, and a data point that pushes back the US-tightening ghost is pure fuel for the carry.
Realized vol on the pair at 7.18% fits the tone: no stress, conviction instead. Global appetite helps too, with ES futures green despite yesterday's red close.
The curve breathes, but the long end runs the show
The 10Y sits at 4.59% after easing, and the 2s10s curve holds a positive 0.36pp slope. It's not aggressive bull steepening, but the message is relief: less inflation premium priced into the long end.
Here's my read, as a market view: the bias favors the peso as long as the 10Y doesn't break and hold above 4.60%. Above that level, with crude pushing, I turn neutral because the disinflation story loses traction.
The wildcard is called oil
The one serious counterweight is WTI at 79.83, up more than 15% in July after the ceasefire ended. It's the upside inflation risk the Fed can't ignore, and the next CPI (August 12) will tell whether it bleeds into core.
The domestic calendar is clean today; the next heavyweight is the ECB on July 23. With no local catalyst, the peso trades to the beat of global appetite.
The Risk On Score climbs from 61 to 62, firmly CONSTRUCTIVE: a contained VIX at 16, a strong peso and a healthy curve hold up the scaffolding. The picture is risk-on, but crude is the crack to watch.
— See you tomorrow for Thursday'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 (2026-07-15) — the live value on the homepage may have changed.
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