Gold jumps 2.63% as the peso nails its floor: spot at 17.27, score 58
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!
Gold rips higher and breaks the risk-on script
The morning's most unusual move isn't in FX: gold jumps 2.63% to 4,140 (z +1.8), its strongest session in weeks. The odd part is the company it keeps: the S&P closed +1.48% at 7,601 and futures add another +0.35%. Safe haven and equities climbing side by side.
The flip side is crude. WTI sinks 3.11% to 77.84 on US–Iran diplomatic progress in the Strait of Hormuz. Less geopolitical premium in energy, more appetite for a hedge in metal. MOVE ticks up to 80.48: jitters in bonds, calm in stocks.
The peso nails its 10-day floor
USD/MXN trades at 17.27, 0 centavos from the 10-day support at 17.2700. Yesterday we flagged how the currency shrugged off the oil rout; today it leans again on the strong side of the range.
The fuel is unchanged: the 2.87pp Banxico–Fed spread underpins the rate premium. Chicago specs are net long the peso by 72,528 contracts —positioning backs the carry rather than fighting it.
With realized vol at just 6.75%, the currency is breathing easy. The floor holds.
Soft yields, curve keeps its shape
The 10Y eases 2bp to 4.67%, even after the July 30 FOMC left a hawkish tone with Warsh pushing the long end of the Treasury curve. The 2s10s slope stays positive at 0.47pp.
A steep curve plus a wide rate gap is the peso's best ally. Nothing in the fixed-income leg destabilizes it today.
Banxico sets the week's tempo
No high-impact data today: June JOLTS prints at 8:00 CDMX, but the marquee event is Banxico on Aug 6, with consensus pointing to a hold at 6.50%. Behind it come Mexico's CPI (Aug 7) and the US CPI (Aug 12).
As backdrop, the US and Mexico agreed to a 90-day extension of the tariff deadline that expired Aug 1. A near-term unknown clears, though the underlying duties remain.
View: with the pair glued to 17.2700 and the rate premium on its side, the bias favors the peso as long as the 10Y doesn't break 4.80% on a sustained basis and the DXY doesn't reclaim 101; above that I turn neutral. I ride the statistical base —mildly pro-peso— propped up by the carry catalyst.
Risk On at 58/100, CONSTRUCTIVE: VIX at 15.62, the peso on the strong side of the range and the S&P at highs push the score up; contained carry tempers it. A rate-heavy week lies ahead.
— See you tomorrow for Wednesday's view.
Index at the time of this note (2026-08-04) — the live value on the homepage may have changed.
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