Gold jumps 1.99% to 4,448 as the peso hugs its floor: spot at 17.12, score 58

Good morning!

Gold rockets to 4,448 and screams hedge

The move breaking the calm this morning is gold: +1.99% to 4,448, 1.3 times its typical day. Nothing accidental on the eve of the U.S. CPI.

The metal works as cheap insurance: with the Fed drifting away from a September cut and MOVE climbing +2.72 pts to 75.46, desks are paying up for protection. When bonds get jittery, gold prices the fear.

The peso flirts with the door of its floor

USD/MXN trades at 17.1184 (-0.12%) and edges toward the low end of its range: it sits just 3 centavos from the 10-day support at 17.0924. That floor is today's level to beat.

What's holding the peso up is no mystery: the Banxico–Fed differential of 2.87pp pays you to stay, and Chicago specs remain net long by 76,543 contracts. Banxico confirmed its 6.50% pause Monday with an upside bias, and that rate premium is still the anchor.

A steep curve and a Fed backing off September

The U.S. 10Y eases to 4.70% (-4bp) and the 2s10s slope stays positive at 0.46pp: bear steepening catching its breath before the print. The long end sets the message, not the front.

Friday's jobs report painted the backdrop: 23,000 positions cut sank the odds of a September cut to 42%, from 67% a week ago. The market stopped taking the easing for granted, and that gives the dollar a floor even as DXY barely budges at 99.84.

Toward CPI: my read ahead

Tomorrow at 6:30 CDMX is the event: July CPI, consensus +3.4% headline and +2.5% core, with prediction markets betting on a softer read. It's the catalyst that orders the rest of the week.

My call: the bias favors the peso as long as the pair respects the 17.09–17.10 zone and the rate gap holds at these levels. I'm siding with the statistical base, which barely beats a coin flip, but carry and positioning reinforce it. A hot CPI tomorrow that pushes the 10Y above 4.80% and sends the pair back over 17.30 turns me neutral — that's where the argument loses traction.

Watch the peso–10Y decorrelation at -0.04 this month: today the exchange rate dances more to carry and EM appetite than to the U.S. note. Mexico's IPC slips -0.75%, local noise that doesn't change the picture.

Risk On reads 58/100, CONSTRUCTIVE, up from 52 yesterday: VIX at 15.56, peso realized vol at 5.84% and a healthily sloped curve push the gauge. Constructive ground, with tomorrow's data as the real exam.

— See you tomorrow for Wednesday's view.

Correction (Aug 24, 2026): this view dated Banxico's decision to Monday. The announcement was Thursday, August 6. The date is corrected; the 6.50% pause it describes is accurate.