Mexican stocks rise 1.10% as global risk cools; I step back to neutral

Happy Monday — let's get the week going!

Mexican equities opened the week with a bid: the IPC is up 1.10% to 64,532, a bigger move than a routine session delivers. Local risk appetite showed up. It just didn't carry into the currency.

USD/MXN opens glued to 18.1308 (-0.08%), and against the euro the peso actually firms (EUR/MXN -0.56%). Stocks higher, currency parked.

The weekend drained Friday's bounce

Risk On slips from 64 to 50. Read it as a pause rather than a turn: VIX backs up to 16.12 from 15.61, Bitcoin sheds 0.68%, and S&P futures sit marginally red (-0.05%) after the cash index closed +0.73% Friday.

The pressure point is rates. MOVE at 107.29 keeps Treasury vol in uncomfortable territory and the 10Y at 5.27% underpins the dollar. With the entire long end above 5%, leaning against the greenback carries a cost.

The Banxico-over-Fed rate premium, now 2.62pp, still pays you to hold pesos; with bond vol where it is, the ride is bumpy.

Scorecard note: my September 28 pro-dollar call matured today and validated — USD/MXN rose 2.14% over the following five sessions. That firm-dollar read is still the backdrop.

Why I'm off the peso without going long dollar

On Friday I leaned to the peso on the risk bounce. That bounce never extended and the gauge dropped back to 50, so I return to neutral. My 18.30 line was never touched, so there's nothing to chase on the dollar side either.

What bothers me: I was long the peso into the weekend and Monday opens flat, offering no payoff. A view that won't move your way is a view on probation.

The technical picture doesn't invite a reversion trade: the pair sits more than eight times its daily range above its 20-day mean. That stretch doesn't signal a snapback; the 21-year series says the opposite. It just measures how fast it ran.

I see the peso ranging between 18.00 and 18.30 while global risk stays undecided. The next judge is Mexican September inflation, Thursday at 6:00 CDMX.

Break 18.00 and I tilt back to it; close above 18.30 and I go with the dollar.

— See you tomorrow for Tuesday's view.