Crude craters 5.82% as the peso stalls 4 centavos from its ceiling, 17.25

Good morning!

Oil pulls the anchor

The overnight action lives in energy: WTI collapses 5.82% to $90, nearly double its normal daily swing — one of the sharpest drops of the quarter in the energy complex.

Two weeks ago crude near $100 pushed the ECB into a hike; today the board is pricing the opposite script. For Mexico that reads as disinflation, and it lands two days before Banxico's Thursday decision. A cheaper barrel hands room back to a central bank on hold since June.

Four centavos from the ceiling

The dollar sits 4 centavos below its 10-day high at 17.2920, opening at 17.2489, up a mere 0.12% and stuck at the top of its range with realized vol still flat at 5.26%.

What bothers me: the peso didn't join the risk rally, not yesterday on Bitcoin's +5% and not today with the S&P eyeing a record. If you expected the currency to cash in on that move, two straight sessions said no; this smells like local supply rather than global stress.

The gauge splits the difference: Risk On slips from 69 to 53, still CONSTRUCTIVE, dragged by Bitcoin's pullback and a peso scoring low (sub 38) precisely because it's pinned to its upper bound. VIX at 14.67 is calm; MOVE at 81 keeps rates on guard.

Rates that don't move the peso

The 10Y eases to 4.93%, down four basis points, curve still positively sloped at 0.25pp. The 20-day peso–Treasury correlation runs at −0.11 this month: the US bond isn't steering the currency, the local story is.

The rate pickup over Banxico narrows to 2.62pp, thinner than in spring but still enough to keep carrying pesos attractive.

Where I stand into Banxico

My September 15 dollar call worked: the pair added +0.73% over five sessions and matured today. I'm staying on that side, with a caveat.

Yesterday I tied a dollar return to a close above 17.2711; that cross never came, the spot didn't even touch it, and the rolling high climbed to 17.2920. I lean dollar on the tape more than the level: as long as the peso doesn't close below 17.10, momentum points it toward the ceiling before the floor.

The concession is real: a string of oil declines could hand Banxico and the peso the disinflation case they lack today.

I drop the bias if the pair closes below 17.10, with Thursday's decision as the next judge.

— See you tomorrow for Wednesday's view.