Crude drops 3.40% and the peso barely breathes: USD/MXN steady at 17.49
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.
Happy Friday! Let's close out the week.
Crude collapses and the peso holds the line
Yesterday oil lit up rates; today the script flips. WTI falls 3.40% to 89.06 and Brent, which topped 100 dollars on Thursday, gave back more than 4% on the session.
With energy cooling, the 10Y eases to 4.68% from the 4.70% it hit yesterday. The peso, which paid the toll on Thursday, gets a breather — a timid one.
The recovery is measured in coins, not bills: cheaper crude stops the bleeding, but it doesn't reverse it.
17.4870: absorbing Thursday's blow
Thursday's oil shock cost the peso around 10 centavos, with USD/MXN closing above 17.50. This morning the pair opens at 17.4870, a couple of centavos in the peso's favor — steady, still hugging the 17.5531 ceiling we've been flagging.
The Banxico–Fed gap holds at 2.87pp —6.50% at home versus 3.63% stateside— and first-half July inflation at 3.10% validates Banxico's pause. The rate premium is intact.
But it isn't enough for a real rebound when global appetite fades: S&P 500 -1.21%, Mexico's IPC -1.54% and a firm DXY at 101.47. Carry pays in calm, not in aversion.
The curve loosens at the long end, not the front
The relief in the ten-year didn't compress the front premium: the 2s10s holds at 0.36pp, positive. The long end breathes on cheaper oil, while the front stays anchored to whatever the Fed decides.
That's the nuance: yesterday's bear-steepening didn't reverse, it just paused. A MOVE at 80.08 confirms the bond market still isn't at ease.
FOMC Wednesday: the 35% that changes the math
Next week weighs more than today. Consensus prices ~63-65% for a hold at 3.50-3.75%, but the odds of a 25bp hike jumped to ~35% from 10% a week ago. That's what's keeping the dollar bid while crude cools.
Market view: with the meeting five days out and hike risk rising, the bias favors the dollar in the short term, with 17.5531 as reference. I turn neutral if the pair closes below 17.3612 or the 10Y breaks 4.60% on a sustained basis. It's opinion, not instruction.
The Risk On score rises from 42 to 46, but stays in DEFENSIVE territory: oil relieves, FOMC risk doesn't. With a light calendar —only New Home Sales— the focus is positioning ahead of Wednesday.
— Have a great weekend — see you Monday. ☕
Index at the time of this note (2026-07-24) — the live value on the homepage may have changed.
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