Traders assign a 98.8% implied probability to no U.S. invasion of Mexico in 2026, reflecting sustained bilateral cooperation on border security, cartel operations, and counternarcotics despite periodic U.S. rhetoric about strikes against foreign terrorist organizations. Mexican President Claudia Sheinbaum has repeatedly rejected any U.S. combat presence on Mexican soil, emphasizing sovereignty and preferring intelligence sharing plus joint training. Recent months have seen expanded U.S.-Mexico military exercises, record-low border crossings, and shelved plans for unilateral airstrikes, with both governments prioritizing coordinated actions over escalation. A full-scale invasion would face major diplomatic, legal, and logistical barriers. Late shifts in U.S. policy or a major security breakdown could still alter trajectories before year-end.