4 centavos from the floor: VIX eases, peso lands at 17.40, score at 56
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 VIX sets the tone: fear decompressing
Today's most abnormal reading isn't a price, it's a calm: the VIX drops 1.57 points to 19.09 (z -1.9), its most unusual print of the quarter. Implied vol is decompressing even with the S&P closing -1.52% yesterday.
ES futures come in +0.58% and gold adds 2.47% to 4,135 as a hedge, not as panic. This is an orderly reshuffle morning, not risk aversion. The picture is tempered risk-on.
The peso a hair from the 17.36 floor
USD/MXN trades at 17.4025, landing 4 centavos from the 10-day support at 17.3612, after reversing the 17.52 it hit yesterday under post-FOMC dollar pressure. The peso recovered everything it gave up, and then some.
The anchor is still the rate premium: 2.87 points between Banxico at 6.50% and a Fed near 3.63%. Chicago speculators sit net long 71,699 contracts —positioning, not today's flow— backing the floor while the peso↔10Y correlation stays flat at +0.02: the differential pays on its own.
Yields firm, but the curve doesn't punish
The US 10Y climbs to 4.67% (+1.15%) after yesterday's hawkish recalibration, with three dissenters wanting a hike. The long end tightens without breaking the peso's mood.
The curve keeps its positive slope: the 2s10s at 0.35pp with the 30Y at 5.09%. No scary bull flattening, no recessionary signal; the market digests higher-for-longer without dislocating credit. The MOVE at 74 confirms rate vol is contained.
A loaded calendar: BoJ, Banxico and payrolls
PCE printed in line (core +0.1% m/m, +3.3% y/y) and the BoE held at 3.75%: two of the day's boxes cleared with no surprise. Attention shifts to the Bank of Japan tomorrow, then Banxico on Aug 6 and payrolls on the 7th.
My read: the bias favors the peso as long as the 17.36 floor holds and the 10Y doesn't settle sustainably above 4.75%. If the long yield entrenches there or the pair reclaims the 17.55 ceiling, I turn neutral —that would be the signal that carry stops running the show. This is market opinion, not an instruction.
The Risk On score rises from 48 to 56, CONSTRUCTIVE: a sub-40 VIX, a firm peso and a healthy-sloped curve lift the gauge. The vol decompression does the rest.
— See you tomorrow for Friday's view.
Index at the time of this note (2026-07-30) — the live value on the homepage may have changed.
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