Gold rips 2.42% to 4,472; peso drops 7 centavos to 16.99, 2 from the floor, score 63

Good morning!

Gold breaks toward 4,472 and the U.S. 30-year revisits 2002

The metal is this morning's star: +2.42% to 4,472, its most atypical jump of the quarter (z +1.6). U.S.–Iran tension lit up hedging demand and pressured the long end.

The 30-year Treasury touched ~5.32%, its highest since 2002. When the long end unanchors, gold gets paid: the classic reflection of a market seeking real safety, not paper.

Crude eases today (WTI -1.71% to 83.49) after yesterday's push, but the geopolitical premium is alive. Keep an eye on that front.

The peso shrugs off the noise and scrapes its floor at 16.99

Against the scare, the Mexican currency drops 7 centavos to 16.9920 (-0.40%) and plants itself 2 centavos above the 16.9711 support. The peso isn't buying the global-risk narrative.

The engine is the rate premium: the Banxico–Fed gap at 2.87pp pays to stay long. Add EM appetite —US$18.8 billion flowed into emerging debt and equities in July— and a net-long speculative position of 83,673 contracts as of Aug 11.

The MSCI EM Currency Index printed an all-time high. The underlying wind blows in favor.

The curve steepens and decouples from the peso

The 10Y eases to 4.66% (-5bp), but the 30Y rises: the slope steepens through the long end, not the front. This is steepening driven by term premium and oil, not by expectations of an imminent cut.

The 2s10s at 0.53pp confirms a healthy positive slope. And the 20-day peso↔10Y correlation at -0.21 says the pair is trading on its own story today, not tethered to Treasuries.

FOMC today, PCE next week

At 12:00 CDMX the FOMC minutes drop. July's meeting held rates at 3.50%-3.75% with 3 dissents calling for a hike —the first directional block since 2016. The tone on those voices moves the afternoon dollar.

PCE waits until Aug 26. Until then, EM flows and geopolitics call the tune.

My take: the bias favors the peso while the 16.97 floor holds and the rate differential doesn't compress. The historical prior is barely 54% —a shade better than a coin flip— so the catalyst matters more here: contained dollar and carry that pays. A close above 17.10 with the 10Y breaking 4.75% turns me neutral.

Risk On rises from 51 to 63/100, CONSTRUCTIVE: VIX at 15.57, peso realized vol at 4.29% and firm carry lift the score. The appetite is there, with one eye on the minutes.

— See you tomorrow for Thursday's view.