Risk score deflates to 48 as the 10Y at 4.64% cools the peso's bounce

Good morning!

Yesterday's bounce runs out of steam

Yesterday the gauge jumped to 62 and the peso was flirting with the 17.3672 floor. Today the tape flips: the score drops to 48 DEFENSIVE and the greenback claws back some ground.

There's no high-impact print in the US or Mexico on today's calendar. Global flows set the tone: yields higher, crude ripping and S&P futures in the red (-0.31%) despite the 7509 close (+0.89%).

The peso hands back part of its gains

USD/MXN trades at 17.4177, barely +0.02%, after the currency closed yesterday up 0.56% near 17.43 (FIX at 17.4315).

The rate cushion is holding the peso up: the Banxico–Fed differential stays at 2.87pp, enough of a pickup to keep carry demand alive through the noise.

Realized vol at 7.75% says the market isn't nervous about the currency… yet.

The 10Y climbs to 4.64% and bites

The US benchmark rises to 4.64% and the 2s10s stays positive at 0.39pp: no imminent recession, but the term premium is being paid.

Crude +2.08% and gold at 4132 (+1.49%) flag that inflation isn't buried; that cocktail of higher yields is the pebble in the shoe for global appetite.

With FedWatch at 14% for a July hike and 64% for September, the dollar's restrictive tilt won't ease anytime soon.

A central-bank week ahead

The ECB opens tomorrow; the FOMC decides on the 29th, PCE and the BoE land on the 30th, and the BoJ wraps up on the 31st. A loaded slate that could recalibrate the global rate premium.

My read, as a market view: as long as USD/MXN respects the 17.5752 ceiling and the differential holds, the bias stays modestly in the peso's favor. A close above that resistance —most likely driven by the 10Y accelerating— flips me to neutral.

The score at 48 DEFENSIVE captures the moment: no panic, but with yields rising and USMCA as a lingering risk, this isn't a session to reach for it.

— See you tomorrow for Thursday's view.