Latin American Pulse for Friday, May 8, 2026

Lula-Trump Three Hours at White House: “Important Step,” Working Group on Tariffs, No Critical-Minerals MoU — Banxico Confirms 25 bp Cut to 6.50% in Split Vote, Closes 14-Cut Cycle — STF Royalties: Cármen Lúcia Votes Pro-RJ but Dino Pediu Vista, Suspenso Sin Fecha — Ibovespa Plunges −2.38% to 183K, MERVAL Gives Back, COLCAP −0.98% — Bradesco Q1 R$6.81B Beats Ninth Quarter Running, Axia R$2.631B Reverso Pérdida — Milei en Milken: “Vayan al Sur,” Milken Endorsement, Chevron Meeting — Bolivia Bloqueos Drop 64→18 But Túpac Katari + Ponchos Rojos Hold Out for Paz Renuncia — Sheinbaum Responde a Trump: “Estamos Actuando,” −50% Homicidios — Colombia T-23: Cepeda en Cúcuta, Constituyente Tension Splits Field — Fernández Juramentación Today; Chaves Becomes Super-Minister

Lula-Trump: Three Hours at White House, “Important Step,” Working Group on Tariffs

Thu May 7: Lula-Trump 3hr meeting incluye bilateral + beef-fillet lunch; Oval Office press conference cancelada (Lula pidió no haber prensa antes para reunirse primero con Trump); ambos lados positivos — Lula “muy muy satisfecho”, Trump Truth Social: “very dynamic president of Brazil”, “very well”; Lula al Brazilian embassy: “important step in consolidating the Brazil-United States relationship”; Trump pidió grupo de trabajo US-BR para revisión de tariff estructura próximas semanas; sin MoU minerales críticos (oficiales Lula a Reuters: no acuerdo en MoU básico); Trump le dijo a Lula sin planes invasión Cuba; Lula ofreció “share Brazil’s mineral wealth con quien quiera invertir”; Lula contó que Trump quitó naranjas de la ensalada durante almuerzo; Section 301 investigación (Pix, ethanol, deforestación) plazo final julio 2026 sigue vigente; Alckmin presidente interino, Lula regresa hoy May 8

What Happened

• —The meeting: President Luiz Inácio Lula da Silva and President Donald Trump met for three hours Thursday at the White House, longer than the schedule called for. The two leaders began with a working bilateral, then took a beef fillet lunch — with Lula later telling reporters at the Brazilian embassy that Trump “picked the orange slices out of his salad.” The previously announced Oval Office press appearance did not occur; Lula said he had asked the US side not to hold a press conference before the meeting because he wanted to meet with Trump first. The Brazilian president called the encounter an important step in consolidating the Brazil-United States relationship, said it was important that the United States regain an interest in things happening in Brazil, and described himself as very, very satisfied. Trump posted on Truth Social that the meeting with the very dynamic president of Brazil went very well. Background: Lula heads to White House.
• —The substance: The two governments agreed to establish a US-Brazil working group that will discuss the tariff structure over the coming weeks. Brazilian officials told Reuters the working group “bought them some time” on the tariff issue. There is no critical-minerals memorandum of understanding — sources close to Lula said negotiators could not agree even on a basic MoU framework. Lula told reporters he had nonetheless made clear Brazil is willing to share its mineral wealth with whoever wants to invest in the country — Brazil holds an estimated 21 million tonnes of rare earths (24.7% of global) and 94% of niobium reserves, with only 35% of national territory geologically mapped and 1% of global rare earth production. On Cuba, Lula said Trump told him directly there are no plans for a US invasion. The Section 301 investigation — covering Pix, ethanol, and illegal deforestation — keeps its July 2026 final-report deadline as the next decisive moment. The 50% tariff package Trump imposed in mid-2025 has already been substantially loosened on beef and coffee to ease US grocery prices. Tensions remain over digital trade after Brazil blocked the US-backed renewal of a WTO e-commerce tariff moratorium and over high Brazilian ethanol tariffs. Vice President Geraldo Alckmin acted as interim president; Lula returns to Brasília today. Coverage: Lula lands in Washington for Trump White House meeting on Pix.

OUTLOOK: BULLISH

Banxico Confirms 25 bp Cut to 6.50%, Closes 14-Cut Cycle in Split Vote

Thu May 7 13:00 CST: Banxico cortó 25 bp a 6.50% en decisión dividida — cerró ciclo de relajación de más de 2 años, 14 cortes desde marzo 2024 (pico 11.25%); statement: “Looking ahead, the Governing Board estimates that it will be appropriate to maintain the reference rate at its current level”; Banxico equilibró concerns sobre inflación above-target con presión por revivir economía en desaceleración; Q1 GDP −0.8% q/q (mayor caída desde Q4 2024); Heath dissent watch — split vote indicado, cycle end signal claro; Banorte 18-month hold confirmed; JPM/BBVA Research aligned; April CPI prinst mañana misma; Citi survey 32 de 35 analistas esperaban movida (vs 14 dos semanas antes); IPC México +0.24% to 70,019.45, RSI 57.67 — recovery por encima Tenkan/Kijun

What Happened

• —Banco de México cut its benchmark interest rate by 25 basis points to 6.50% in a split decision Thursday May 7 and announced the end of the easing cycle. The statement read: Looking ahead, the Governing Board estimates that it will be appropriate to maintain the reference rate at its current level — closing a 14-cut, 450 basis-point cycle that began in March 2024 from an 11.25% peak. The Junta balanced persistent concerns over above-target core inflation with pressure to revive a slowing economy after Q1 2026 GDP contracted 0.8% quarter-on-quarter — the largest contraction since Q4 2024. Governor Victoria Rodríguez Ceja had told senators on April 28 the Junta would weigh one last adjustment. The Citi survey published the prior week showed 32 of 35 analysts expecting the cut, up from 14 two weeks earlier. Banorte’s 18-month hold call, JPMorgan’s terminal-rate framing, and BBVA Research’s base case all aligned with the 6.50% terminal call. The IPC México added 0.24% Thursday to 70,019.45, the fourth consecutive positive session, with the RSI at 57.67 above the Tenkan and Kijun. The MACD turned positive at +113.37 / +78.47. The Mexican peso strengthened slightly against the dollar after the decision. Background: Mexico investment contraction and the Banxico final cut.

OUTLOOK: WATCH

STF Royalties: Cármen Vota Pro-RJ, Dino Pediu Vista, Suspenso Sin Fecha

Thu May 7: Cármen Lúcia votó pela inconstitucionalidade da Lei 12.734/2012 después de 1h30 de fundamentación — favorable a RJ/SP/ES; “Eu tenho para mim que o artigo 3º. da Constituição não pode ser interpretado como uma distribuição obrigatória igualitária e exata dos recursos”; royalties têm caráter “compensatório”, não “redistributivo”; estados productores sufren ônus ambientais, administrativos, financeros; estados productores no recaudan ICMS sobre combustíveis enviados a outros estados; Flávio Dino pediu vista após elogiar relatora — “voto traz luzes” — alegando posibles divergências; julgamento SUSPENSO sem data definida; modelo atual mantenido (26.5% productores cada / 8.75% no productores cada); Firjan celebra: “reconhecimento do pacto federativo” — Rio acumula >R$26B perdas; presidente STF Edson Fachin elogiado por Dino; ADI 4917 + 4 ações conjuntas; IBOV cayó −2.38% en gran parte por extensión de incertidumbre fiscal RJ

What Happened

• —The vote: Justice Cármen Lúcia, relator on five actions including ADI 4917, voted Thursday for the unconstitutionality of Law 12.734/2012 — the 2012 oil-royalties redistribution she had suspended via cautelar in 2013 — after a one-hour-and-a-half fundamentación. Her vote favors the producing-state coalition of Rio de Janeiro, São Paulo, and Espírito Santo. Cármen argued the royalties are constitutionally compensatory rather than redistributive, that producing states bear the disproportionate ambient, administrative, and financial costs of extraction, and that article 3 of the Constitution cannot be interpreted as an obligatory and equal distribution of resources, including national natural resources given the peculiarities of confrontante entes. She also noted producing states do not collect ICMS on petroleum and derivatives sent to other states — a structural concession that the royalties offset. The Federação das Indústrias do Estado do Rio de Janeiro (Firjan) celebrated the vote as recognition of the federative pact and of Rio de Janeiro’s constitutional right to compensation, stating Rio state and its municipalities have accumulated more than R$26 billion in lost compensation under the post-partilha regime, with the state contributing R$64 billion in ICMS to other states in 2025 alone.
• —The pediu vista: Justice Flávio Dino requested vista immediately after Cármen’s vote, suspending the merits judgment without a date for resumption. Dino praised the relator vote — saying it brings light to the question — but said he wanted to examine the case further given possible divergences with Cármen. STF president Edson Fachin received public credit from Dino for placing the matter on the calendar. The current model is therefore preserved without a court ruling: producing states retain 26.5% of royalties each, non-producers 8.75% each. Firjan president Caetano: We expected a definitive decision for the situation that afflicts Rio de Janeiro. But we remain confident in the STF, in its mission of preserving and protecting the Constitution. The R$26 billion 2026 exposure flagged by Rio’s procurador-geral Wednesday under the war-driven royalty pool of R$146 billion remains preserved at the current allocation. The Ibovespa fell 2.38% Thursday — a combination of Iran-deal reversal and STF suspenso. Background: STF reopens 13-year oil-royalties question.

OUTLOOK: WATCH

Markets: Ibovespa Plunges −2.38%, MERVAL Gives Back, COLCAP Oversold

Thu May 7 closes: IBOV 183,218.26 (−2.38%, −4,472.60 pts) — RSI 38.79, MACD bearish flip −1,289.97 / −611.52, mayor caída en meses; MERVAL 2,834,283 (−1.63%, −47,069) — RSI 47.51, gave back parte de +4.42% Milken-day rally miércoles; IPC México 70,019.45 (+0.24%, +164) — RSI 57.67 fortaleciéndose post-Banxico; IPSA Chile 10,871.28 (−0.60%, −65.91) — RSI 48.57 stagflation framing intacto; COLCAP 2,165.94 (−0.98%, −21.51) — RSI 38.11 oversold, weak ahead Cepeda Cúcuta + Constituyente noise; USD/BRL 4.9299 (+0.03%) — RSI 36.41 oversold pero estable, MACD bullish slope; BTC $79,555 (−0.58%) — RSI 59.96; broad sell-off driven por (1) reversa Iran-deal hopes (no formal text), (2) STF suspenso extiende incertidumbre fiscal RJ, (3) Banxico hawkish hold language pesaba sobre apetito; foreign flows likely mixed

What Happened

The pattern was broad-based with the Brazilian print as the standout. The Ibovespa’s 2.38% drop combined a reversal of Wednesday’s Iran-deal optimism — which had driven a 1.96% Latin-America-wide rally on Axios reporting that the US and Iran were nearing a moratorium on nuclear enrichment — with the STF’s vista-petition suspenso, which extends fiscal uncertainty for Rio de Janeiro and the producing-state coalition rather than resolving it. The MERVAL’s 1.63% giveback was the natural reset after Wednesday’s 4.42% Milken-day surge had front-loaded the post-trip optimism. The COLCAP’s RSI at 38.11 places the index in oversold territory ahead of Cepeda’s Cúcuta event and the Constituyente fight gripping the closing campaign stretch. The IPC México’s 0.24% gain on the Banxico decision was the only positive among the five tracked indices.

RISK: CRITICAL

Brazil Earnings: Bradesco Beats 9th Quarter, Axia Reverses Loss on Free-Market Surge

Wed May 6 after B3 close: Bradesco Q1 R$6.81B ($1.35B) +16.1% YoY +4.5% QoQ — beat Bloomberg consenso R$6.62B (3%) y LSEG R$6.7B; ROAE 15.8% vs 15.2% est; 9° trimestre consecutivo crecimiento bajo Noronha; cartera R$1.09T (+8.4% YoY) NPLs 90+ at 4.2%; ADRs +3.37% NYSE after-market; PDD +26.5% YoY a R$9.67B (pre-provisioning MSME); ROE gap vs Santander cerró de 3.2pp a 0.2pp en un año (15.8 vs 16.0) — primera vez Bradesco-Santander prácticamente paritario; Axia Energia (B3:AXIA3, ex-Eletrobras) Q1 R$2.631B ($521M) reverso pérdida R$354M; adj NI R$3.707B ($734M); reg adj EBITDA +60% R$8.6B ($1.7B); free-market contribution margin +412% R$899M→R$4.602B (descotização); leverage 1.8x ND/EBITDA (de 2.0x); mkt cap R$181B ($35.8B); precio R$62.14 — Latin America’s largest electricity company, 50 GW+ portfolio, ~33% Brazil’s electricity

What Happened

• —Bradesco beats: Bradesco (B3: BBDC4, NYSE: BBD) reported Q1 2026 recurring net income of R$6.81 billion (US$1.35B) on Wednesday May 6 — up 16.1% year-on-year and 4.5% quarter-over-quarter, beating Bloomberg consensus of R$6.62 billion by 3% and LSEG’s R$6.7 billion estimate. Return on average equity reached 15.8% versus the 15.2% analyst estimate, marking the ninth consecutive quarter of profit growth under CEO Marcelo Noronha’s “step-by-step” restructuring. The credit portfolio reached R$1.09 trillion (+8.4% YoY) with NPLs above 90 days stable at 4.2%. Provisions for doubtful loans (PDD) rose 26.5% YoY to R$9.67 billion — the bank pre-provisioning for expected MSME deterioration. ADRs rose 3.37% in NYSE after-market trading following the release. The most consequential structural development is the ROE convergence with Santander Brasil: a year ago Bradesco trailed by 3.2 percentage points (14.4 vs 17.6); in Q1 2026 the gap is 0.2 percentage points (15.8 vs 16.0), with Santander’s own deterioration accounting for half the convergence. Coverage: Bradesco Q1 profit beats at R$6.8B.
• —Axia reverses: Axia Energia (B3: AXIA3, NYSE: AXIA) — the former Eletrobras rebranded in late 2025 and Latin America’s largest electricity company — reported Q1 2026 net income of R$2.631 billion (US$521M), reversing a R$354 million loss a year earlier. Adjusted net income reached R$3.707 billion (US$734M); regulatory adjusted EBITDA surged 60% to R$8.6 billion (US$1.7B). The structural driver was a 412% explosion in the free-market energy contribution margin — from R$899 million to R$4.602 billion — as the privatisation-era descotização (decoating) of hydroelectric plants from regulated to free-market pricing continued to transform the revenue profile. Leverage fell to 1.8x net debt/EBITDA from 2.0x. The stock trades at R$62.14 with a market capitalisation of R$181 billion (US$35.8B). Axia operates a 50 GW+ portfolio across hydroelectric, wind, solar, and nuclear assets — including half of the Itaipu binational dam — generating approximately one-third of Brazil’s electricity. Coverage: Axia (ex-Eletrobras) posts $521M Q1 profit on free-market surge.

OUTLOOK: BULLISH

Milei en Milken: “Vayan al Sur,” Milken Endorsement, Chevron Meeting

Wed May 6 PM PT: Milei discurso plenario cierre 29° Conferencia Anual Milken Institute Beverly Hills — 17º viaje a EUA, segunda participación en Milken (1ra fue 2024); presentación a cargo de Michael Milken: “Si él tiene éxito, puede cambiar toda América Latina”; Milei: “el sueño americano no está muerto”, “está renaciendo en dos países: Estados Unidos y Argentina”; mensaje al sector empresario: “Vayan al Sur”; reunión privada con Milken 10am hora local; reunión con grupo reducido empresarios + Caputo (economía) + Quirno (canciller) + embajador Alex Oxenford; encuentro con executivos Chevron post-Milken-meeting; comitiva regresó nocturno hacia Buenos Aires, llegó 13:30 jueves; viernes 14h gabinete en Casa Rosada; MERVAL Wed +4.42% (mejor sesión meses), Thu −1.63% giveback; Cavallo-Caputo feud sigue de fondo

What Happened

• —President Javier Milei delivered the closing plenary address at the 29th Annual Milken Institute Global Conference in Beverly Hills on Wednesday afternoon — his 17th visit to the United States since taking office in December 2023, and his second appearance at Milken (the first was 2024). Foundation host Michael Milken introduced Milei and told the audience: If he succeeds, he can change all of Latin America. Milei opened with the line that the American dream is not dead — it is being reborn in two countries: the United States and Argentina, defended the libertarian economic framework, and used the slogan Vayan al Sur to direct international investors to commit capital to Argentina. Earlier in the day Milei held a private meeting with Milken at 10am local time, then met with a group of executives alongside Economy Minister Luis Caputo, Foreign Minister Pablo Quirno, and Argentine ambassador to the US Alex Oxenford. After the Milken meeting, the same delegation held a separate session with Chevron executives — one of the largest US energy multinationals — covering Vaca Muerta exploration, production, and commercialisation. The comitiva flew back overnight to Buenos Aires, arriving 13:30 Thursday; Milei chairs a cabinet meeting at Casa Rosada at 14:00 today. The MERVAL ripped 4.42% Wednesday in anticipation of the Milken pitch, then gave back 1.63% Thursday as the trip ended without concrete capital announcements. The Cavallo-Caputo public feud over peso liberalisation remains the domestic noise of the moment. Coverage: Cavallo-Milei FX feud.

OUTLOOK: WATCH

Bolivia: Bloqueos Drop 64→18, Túpac Katari + Ponchos Rojos Hold Out for Paz Renuncia

Thu May 7: ABC reportó 17-18 puntos bloqueo activos (vs 64 peak Tuesday) — solo La Paz y Beni con cortes, Santa Cruz levantó; gobierno con Paz como garante consiguió ACUERDOS con (1) Confederación Nacional de Choferes — Lucio Gómez firmó después diálogo con Min Zamora 13:00 Casa Grande del Pueblo, (2) CSUTCB — gobierno comprometió impulsar abrogación Ley 1720 ante Asamblea Legislativa, (3) sectores indígenas Beni/Pando; PERO Federación Túpac Katari de La Paz sigue paro indefinido en 20 provincias (desde 6 de mayo) + Ponchos Rojos en Achacachi/Lahuachaca radicalizados — exigen “renuncia de Rodrigo Paz” o nada; bloqueos estratégicos: La Paz-Copacabana (Cuartel General Tomás Katari, km 7 Guaqui), La Paz-Viacha (Achica Baja), La Paz-Oruro (Panduro); apoyo de mineros (Andrés Paye FSTMB); fabriles tomaron Min Trabajo (13 detenidos), pidieron liberación cerca FELCC; Vicente Salazar (ejecutivo Túpac Katari) negó vínculo MAS-evismo, denunció discriminación a Radio Fides; COB paro indefinido desde 1 mayo; dólar paralelo Bs 9.64-10.50; BM −1.1% PIB 2026, CEPAL +0.5%

What Happened

• —Bolivia’s Administradora Boliviana de Carreteras reported 17 to 18 active road blockages by Thursday morning, sharply lower than the 64-point peak on Tuesday and the 31-point reading earlier in the week. The government, with President Rodrigo Paz acting as guarantor, secured three agreements: with the Confederación Nacional de Choferes after Lucio Gómez signed at the Casa Grande del Pueblo following dialogue with Public Works Minister Mauricio Zamora; with the Confederación Sindical Única de Trabajadores Campesinos de Bolivia (CSUTCB), where the executive committed to pushing the abrogation of Law 1720 to the Asamblea Legislativa; and with indigenous sectors from Beni and Pando, who had completed a 27-day march from Cobija to La Paz. The unresolved fronts are the Federación Departamental Única de Trabajadores Campesinos de La Paz Túpac Katari, which maintains an indefinite blockade across the twenty provinces of La Paz from May 6, and the Ponchos Rojos in Achacachi and Lahuachaca, who radicalised their position to demand the resignation of President Paz — la renuncia o nada per leaders during the protest. Three strategic corridors stay locked: La Paz-Copacabana (Cuartel General Tomás Katari at km 7 of Guaqui in Ingavi province), La Paz-Viacha (Achica Baja), and La Paz-Oruro (Panduro). Mining sectors led by Andrés Paye (FSTMB) backed the campesino mobilisation. Fabriles symbolically took the Ministry of Labour Wednesday — 13 union members detained, with the sector now mobilising near the FELCC for their release. Vicente Salazar, executive secretary of Túpac Katari, told Radio Fides Thursday the protests are not a re-articulation of MAS-evismo and denounced what he called discrimination against campesino organisations. The COB indefinite paro continues since May 1. The parallel-market dollar trades between Bs 9.64 and 9.50; the World Bank projects a 1.1% GDP contraction in 2026 against CEPAL’s 0.5% expansion call. Background: Bolivia blockades, Túpac Katari, and the Paz fuel crisis.

RISK: CRITICAL

Mexico: Sheinbaum Responde a Trump, “Estamos Actuando,” −50% Homicidios

Thu May 7 mañanera #394 Salón Tesorería: Sheinbaum responde a advertencia Trump miércoles (“si México no hace su trabajo, nosotros lo haremos”) — “Nosotros estamos actuando”; presentó datos: reducción homicidios dolosos casi 50% en Mx, presentó documento oficial “Estrategia Nacional de Control de Drogas de EE.UU.” (1ra vez Washington estrategia para prevención); Trump anunció reducción 97% tráfico drogas vía marítima e inicio operación terrestre; insistió cooperación pero “para detener a alguien, pues tiene que cumplirse con la ley mexicana, pruebas, que se envíen pruebas y hasta ahora, pues, no han enviado pruebas”; Tatiana Clouthier renunció IME para postular gubernatura Nuevo León 2027 — criterio Morena obliga renuncia; BTS regresará a México 2027 — Sheinbaum redactó carta agradeciendo a Lee Jae-myung; gas natural: Plan a 2030, México importa >70%, “objetivo aumentar producción y ver otros usos del gas — posibilidad exportar Centroamérica”; Caso Contralmirante Farías detenido por ingresar Argentina con pasaporte falso — distinto Rocha Moya (gobernador con licencia, sin pruebas)

What Happened

• —President Claudia Sheinbaum’s mañanera Thursday from the Salón de la Tesorería at Palacio Nacional pushed back against President Trump’s Wednesday warning that if Mexico doesn’t do its job, we will against narcotrafficking. Sheinbaum’s response: We are acting. She presented data showing a roughly 50% reduction in homicidios dolosos in Mexico under the current security strategy and produced the US Drug Strategy document, telling reporters that for the first time Washington has implemented a strategy that includes prevention. On the cooperation question: I have said it very clearly — we do not protect anyone, but to detain someone, Mexican law must be followed, evidence must be sent, and until now, they have not sent evidence. Trump had announced a 97% reduction in maritime drug trafficking and the start of a terrestrial operation. Tatiana Clouthier resigned the Instituto de Mexicanos en el Exterior to seek the Morena gubernatura nomination for Nuevo León 2027 — the criterion announced by Sheinbaum that any aspirant must vacate position to compete. The K-pop group BTS will return to Mexico in 2027; Sheinbaum drafted a letter today thanking President Lee Jae-myung of South Korea for facilitating the Palacio Nacional visit Wednesday (estimated 50,000 fans gathered at the public greeting). On gas: a Plan to 2030 — Mexico currently imports more than 70% of its gas — our objective is to increase production and explore other uses of gas, including the possibility of exporting to Central America. On the Contralmirante Farías case: detained for entering Argentina with a false passport, distinct from the Sinaloa Governor Rocha Moya situation where evidence has not been provided.

OUTLOOK: WATCH

Colombia T-23: Cepeda en Cúcuta, Petro Constituyente Splits Field

Thu May 7: Cepeda llegó por la mañana a Cúcuta — evento público Plaza Banderas; senadoras + representantes + lideresas Pacto Histórico foro mujeres Norte de Santander; Cepeda volvió a arremeter contra Valencia + Uribe por baldío 6,000 hectáreas que Nicolás Laserna (primo Valencia) ocupó indebidamente >década según Agencia Nacional de Tierras; De la Espriella en gira Bogotá: “Yo lo que he propuesto es un diálogo interinstitucional, tan pronto sea electo me voy a sentar con las altas cortes para ayudarles a resolver sus dolores”; Claudia López en Externado, ofreció “sistema nacional de apoyo al emprendimiento”; Sergio Fajardo “Fantástica Farra de Fajardo” Medellín jueves 7; Petro Constituyente push (committee promovido por Antonio Sanguino registró diciembre, target 2.5M firmas) — rechazo de Fajardo: “La Constitución no puede ser un arma de guerra electoral. La haremos respetar, Presidente. No le quepa la menor duda”; Valencia: “Petro cree que los problemas de Colombia se solucionan con una nueva constitución”; alertas ciberseguridad por amenazas a candidatos; AtlasIntel/Semana May 6: Cepeda 37.4% / De la Espriella 29.4% / Valencia 20.9%; Invamer Apr 26: Cepeda 44.3%; CNC Apr 23-30: Cepeda 37.2%; T-23 first round; T-30 runoff Jun 21; COLCAP −0.98% to 2,165.94 RSI 38.11 oversold

What Happened

• —Twenty-three days before the May 31 first round, Iván Cepeda arrived Thursday morning in Cúcuta for a public event at Plaza Banderas, with senadoras and representatives of the Pacto Histórico holding a parallel foro for the women of Norte de Santander. Cepeda renewed his attack on Paloma Valencia and Álvaro Uribe over the 6,000-hectare baldío that Nicolás Laserna — Valencia’s primo — occupied for more than a decade according to the Agencia Nacional de Tierras. Abelardo De la Espriella continued his Bogotá tour and clarified his institutional posture: What I have proposed is an inter-institutional dialogue — as soon as I am elected I will sit down with the high courts to help them resolve their pain points. Claudia López visited the Universidad Externado and proposed a national entrepreneurship support system. Sergio Fajardo held the Fantástica Farra de Fajardo in Medellín. The dominant strategic question is the Constituyente: a committee promoted by Labor Minister Antonio Sanguino registered with the Registraduría in December 2025 to gather signatures for a National Constituent Assembly with a target of 2.5 million names. Petro is pushing the framework to oxygenate Cepeda’s campaign — but candidates have rejected the move. Fajardo: The Constitution cannot be a weapon of electoral war. We will make it be respected, Mr. President. Have no doubt. Valencia: Petro believes Colombia’s problems are solved with a new constitution. The latest polls remain split: AtlasIntel/Semana May 6 places Cepeda at 37.4%, De la Espriella at 29.4%, Valencia at 20.9%; Invamer April 26 had Cepeda at 44.3%; CNC for Cambio April 23-30 had Cepeda at 37.2%. Cybersecurity alerts on candidate threats add to the closing-stretch noise. Coverage: Colombia election security crisis.

RISK: CRITICAL

Costa Rica Today: Fernández Juramentación, Chaves Becomes Super-Minister

Fri May 8: Laura Fernández toma posesión hoy Estadio Nacional juramentación; Rodrigo Chaves entra como Min Presidencia + Min Hacienda en arreglo sin precedente — preserva inmunidad hasta 2030, concentración política/económica en figura saliente; 22 de 39 carryover Chaves; Manuel Tovar COMEX→Cancillería; Indiana Trejos viceministra→COMEX titular; VP Douglas Soto = embajador en Washington (señal “momento clave relación con EUA”); Roger Madrigal sigue BCCR hasta 2027; Karla Montero Recope; Mónica Taylor CCSS; Gabriela Chacón INS; nuevos: Alexander Sánchez (Salud, ex-CCSS gerente médico), Roy Thompson (Trabajo), Milagro Solórzano (Economía), Carolina Delgado (INAMU, ex-PLN); 2do VP Francisco Gamboa coordina asuntos económicos; Fernández: “Sería mezquino abandonar el camino de bienestar construido por don Rodrigo”; 2026 contexto: Chaves preserva Trump-aligned posture (febrero 2026 Costa Rica eligió pro-Trump conservador)

What Happened

• —President-elect Laura Fernández takes office today at the Estadio Nacional in San José in a juramentación that completes the May 8 transition. Outgoing President Rodrigo Chaves enters the new cabinet as Minister of the Presidency and Minister of Hacienda simultaneously — an arrangement without precedent in Costa Rican democratic history that preserves Chaves’ immunity through 2030 and concentrates economic and political coordination in the figure that just left the presidency. Twenty-two of thirty-nine cabinet posts carry over from the Chaves administration. Manuel Tovar moves from Comex to the Cancillería; viceministra Indiana Trejos rises to COMEX titular. Vice President Douglas Soto will simultaneously serve as Costa Rica’s ambassador in Washington — Fernández framed this as a moment in which the relationship with the United States is key. Carry-overs include Roger Madrigal at the BCCR (mandate runs through 2027), Karla Montero at Recope, Mónica Taylor at the CCSS, and Gabriela Chacón at the INS. New ministers: Alexander Sánchez (Salud, ex-CCSS gerente médico), Roy Thompson (Trabajo), Milagro Solórzano (Economía), and Carolina Delgado (INAMU, ex-PLN). Second VP Francisco Gamboa coordinates economic affairs. Fernández in the cabinet announcement: It would be petty to abandon the path of well-being built by don Rodrigo. The arrangement preserves the Trump-aligned posture that defined the Chaves era — Costa Rica elected a pro-Trump conservative in February 2026, one of the four Latin American electoral wins for the Trump-aligned framework alongside Argentina, Honduras, and the partially aligned Peruvian outcome.

OUTLOOK: WATCH

Regional Snapshot

What to Watch This Week

• —Fri May 8: Costa Rica’s Laura Fernández juramentación at Estadio Nacional, Chaves takes Min Presidencia + Hacienda · Lula returns to Brazil from Washington · US nonfarm payrolls April · Brazil March industrial production · Mexico April CPI 13:00 CST · Milei chairs cabinet meeting at Casa Rosada 14:00
• —Mon May 11: Petrobras Q1 financial results (after B3 close); webcast May 12
• —Wed May 14: INDEC Argentina April CPI (binary for disinflation thesis) · JNE Peru official runoff results due (mid-May per JNE secretary general)
• —Mon May 18: Ecuador curfew (Decreto 370) expires
• —Thu May 21: Banxico minutes (split-vote dissent breakdown)
• —Week of May 25: Mexico-US T-MEC formal negotiation phase opens
• —Sun May 31: Colombia presidential first round · Sun Jun 7: Peru runoff · Jun 18: Copom meeting · Sun Jun 21: Colombia possible runoff · Jul 2026: US Section 301 final report on Brazil · Sun Oct 4: Brazil general election

Frequently Asked Questions

What did Lula and Trump agree at the White House on May 7, 2026?

President Lula and President Trump met at the White House for three hours on Thursday May 7, including a working bilateral and a beef fillet lunch. The two governments agreed to establish a US-Brazil working group to discuss tariffs over the coming weeks, with Lula describing the encounter as “an important step in consolidating the Brazil-United States relationship.” The previously scheduled Oval Office press appearance did not take place; Trump posted on Truth Social that the meeting with “the very dynamic president of Brazil” went “very well.” Officials confirmed there was no critical-minerals memorandum of understanding. Lula said Trump told him there are no plans for an invasion of Cuba. The Section 301 investigation against Brazil — covering Pix, ethanol, and illegal deforestation — keeps its July 2026 final-report deadline.

What did Banxico decide on May 7, 2026?

Banco de México cut its benchmark interest rate by 25 basis points to 6.50% in a split decision and announced the end of a more than two-year easing cycle. The Governing Board statement read: “Looking ahead, the Governing Board estimates that it will be appropriate to maintain the reference rate at its current level.” The cut closes a 14-cut, 450 basis-point cycle that began in March 2024 from a peak of 11.25%. The vote was split rather than unanimous, reflecting persistent concerns about above-target core inflation alongside Q1 GDP contraction of 0.8% quarter-on-quarter. The IPC México added 0.24% to 70,019.45.

What did the Brazil Supreme Court decide on the oil-royalties question on May 7, 2026?

Justice Cármen Lúcia voted Thursday for the unconstitutionality of Law 12.734/2012, the 2012 oil-royalties redistribution that has been suspended for thirteen years under her own 2013 injunction. Her one-and-a-half hour vote favored the producing-state position of Rio de Janeiro, São Paulo, and Espírito Santo. Justice Flávio Dino then requested vista, suspending the merits judgment with no date set for resumption. The Federação das Indústrias do Estado do Rio de Janeiro (Firjan) celebrated the relator vote as recognition of the federative pact. Producing states currently retain 26.5% of royalties each; non-producers receive 8.75% each. The Ibovespa fell 2.38% to 183,218.26.

Why did the Ibovespa fall 2.38% on May 7, 2026?

The Ibovespa closed Thursday at 183,218.26, down 2.38% — the largest single-session drop in months. The sell-off combined two reversals. The Iran-deal optimism that drove Wednesday’s hemispheric rally faded as no formal text was published. The STF royalties suspenso through Justice Flávio Dino’s vista petition extended fiscal uncertainty for Rio de Janeiro and the producing-state coalition without resolution. The MERVAL gave back 1.63% of Wednesday’s 4.42% Milken-day surge. The COLCAP fell 0.98%, the IPSA Chile fell 0.60%, and the IPC México held a 0.24% gain on the Banxico decision.

What were the highlights of Bradesco’s and Axia Energia’s Q1 2026 results?

Bradesco reported Q1 2026 recurring net income of R$6.81 billion (US$1.35 billion) on Wednesday May 6, up 16.1% year-on-year, beating Bloomberg consensus of R$6.62 billion. Return on average equity reached 15.8% against a 15.2% estimate, marking the ninth consecutive quarter of profit growth. Axia Energia, the former Eletrobras rebranded in late 2025, reported Q1 net income of R$2.631 billion (US$521 million), reversing a R$354 million loss a year earlier. Adjusted net income reached R$3.707 billion. Regulatory adjusted EBITDA surged 60% to R$8.6 billion driven by a 412% expansion in the free-market energy contribution margin from R$899 million to R$4.602 billion as the descotização of hydroelectric plants from regulated to free-market pricing continued.

What did Milei announce at the Milken Institute conference on May 7, 2026?

President Javier Milei delivered the closing plenary address at the 29th Annual Milken Institute Global Conference in Beverly Hills on Wednesday afternoon and used the slogan “Vayan al Sur” to invite global investors to commit capital to Argentina. He told the audience that the American dream is being reborn in two countries — the United States and Argentina. Foundation host Michael Milken introduced Milei and said that “if he succeeds, he can change all of Latin America.” Milei also held a private meeting with Milken and a separate session with Chevron executives. The MERVAL closed Thursday at 2,834,283, down 1.63%, giving back part of Wednesday’s 4.42% Milken-day surge.

What is the status of Bolivia’s road blockades on May 8, 2026?

Bolivia’s Administradora Boliviana de Carreteras (ABC) reported 17 to 18 active blockade points on Thursday May 7, down sharply from a peak of 64 on Tuesday. The government secured agreements with the choferes confederation and the CSUTCB, with the executive committing to push the abrogation of Law 1720 to the Asamblea Legislativa. The Federación Túpac Katari maintains an indefinite blockade across La Paz’s twenty provinces from May 6, with three strategic corridors locked. The Ponchos Rojos in Achacachi and Lahuachaca radicalised their position to demand the resignation of President Rodrigo Paz.

What is the Costa Rica handover happening on May 8, 2026?

President-elect Laura Fernández takes office Friday May 8 in the juramentación at the Estadio Nacional. The arrangement is unprecedented in Costa Rican democratic history: outgoing President Rodrigo Chaves becomes Minister of the Presidency and Minister of Hacienda simultaneously, preserving his immunity through 2030 and concentrating economic and political coordination in the figure that just left the presidency. Twenty-two of thirty-nine cabinet posts carry over from the Chaves administration. Vice President Douglas Soto will simultaneously serve as Costa Rica’s ambassador to Washington.

Updated: 2026-05-08T07:30:00Z by Matias Sebastian Lopez · Latin American Pulse Issue Nº 24

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