October payrolls land with the S&P in the red and the peso up 7 centavos

Happy Friday! Let's close out the week.

The peso closed 7 centavos stronger overnight —18.7750 to 18.7066— on Wall Street's ugliest session in weeks: the S&P sank 4.36%, the VIX hovers near 27 and the Risk On index slips from 47 to 45, in DEFENSIVE. That split is what I can't fully square.

October payrolls, the 6:30 trigger

US nonfarm payrolls for October print at 8:30 ET, and as of 6:50 CDMX the number isn't indexed yet (still unconfirmed). The Street looks for +59K to +65K against +29K in September, with unemployment seen steady at 4.2%.

Private ADP already ran hot at +86K, above the script, but the monthly average since early 2025 is a thin +35K. A soft print feeds more Fed cuts and tends to drag the dollar; a strong one pushes the other way.

FXStreet frames the report as a possible trigger to reverse the equity selloff. If the tape reads it as relief, the local unit has something to lean on.

Banxico held, and the curve exhales

I flagged Banxico as yesterday's local judge: it kept the rate at 6.50%, leaving the gap to the Fed at 2.62pp, and that rate pickup still pays whoever holds pesos.

The US 10Y eases about 6bp toward 4.84%, with 2s10s positive at +0.34pp. One caveat: the 20-day peso–10Y correlation is just +0.17, so I won't pin the currency's strength on that rates relief.

Where I draw the line

I'm keeping the pro-peso lean I carried in yesterday: while the pair holds below the 18.80 zone, the rate differential and a VIX that's actually easing today work in its favor. The condition I published —a close above 18.80— never fired; spot didn't even come close.

The rolling ceiling climbed to 18.9586 from yesterday's 18.9234, and the floor sits at 18.5263, so the reference band widens a touch. A hot jobs number that forces a close above 18.80 takes me out.

The judge arrives at 6:30: pro-peso below 18.80, out if it closes through.

— Have a great weekend — see you Monday. ☕