Milei Opens Congress With Combative 90-Minute Address Praising Trump; Mexico Braces for CJNG Succession War After El Mencho Killing Leaves 70 Dead; Brazil Flood Toll Hits 70 as Lula Promises Free Houses
Executive Summary
The Big Picture: Argentina’s President Milei delivered a combative 90-minute state-of-the-nation address on Sunday, opening the 144th ordinary session of Congress. He branded opposition lawmakers “thieves,” “murderers,” and “ignorant,” praised his “special relationship” with Trump, and declared Argentina “a natural link in the West’s strategic value chain.” He touted legislative victories including the labor reform, lowering the criminal responsibility age, the EU-Mercosur deal, and initial approval of a glacier protection law. Milei promised a monthly reform package and attacked “privileged businessmen” surviving on state subsidies—days after tyre manufacturer Fate closed. Over 21,000 companies have closed and 300,000 jobs have been lost during his presidency, according to union sources, even as inflation fell from 211% to 31.5% and the government posted consecutive fiscal surpluses for the first time since 2008.
Mexico is bracing for a dangerous succession war inside the Jalisco New Generation Cartel after the military killing of its founder, Nemesio “El Mencho” Oseguera Cervantes, on February 22 triggered retaliatory violence across 20 of 32 states. At least 70 people were killed in the operation and its aftermath, including 25 National Guard troops in six separate attacks. Guadalajara—a 2026 World Cup host city—was shut down for days. CJNG’s franchise-based structure, operating across 40+ countries, means the cartel’s business may survive even without its kingpin. However, the “line of succession has been broken” with El Mencho’s son jailed in the United States. Global Guardian warns that “internal fragmentation remains highly likely.” The Wilson Center calls this Mexico’s biggest security test in years. By late last week, Jalisco lifted its “code red” and services returned to normal, but analysts warn the real contest for territorial control is only beginning.
Brazil’s Minas Gerais flood death toll rose to 70 on Saturday—including 13 children—with three people still missing. President Lula visited Juiz de Fora on Saturday, embracing weeping residents and promising free houses to those who lost homes. Rainfall in Juiz de Fora has exceeded 760 mm in February, more than triple the monthly average. Brazil’s meteorological agency INMET warned of continued “great danger” from heavy rains in Minas Gerais, Rio de Janeiro, and São Paulo. The disaster—now comparable in political significance to Rio Grande do Sul in 2024—is testing Lula’s emergency response eight months before the presidential election.
The U.S.–Israel strikes on Iran (Feb 28) that killed Supreme Leader Khamenei are reshaping the risk calculus for every Latin American government. Brent crude surged 9% to $79.41 on Sunday evening futures. The region’s diplomatic responses split sharply along political fault lines: Argentina’s Foreign Minister Kirno expressed “unconditional support” for Washington and Tel Aviv; Milei celebrated Khamenei’s killing, consistent with Argentina’s longstanding grievance over the 1994 AMIA bombing. Chile’s government took a more cautious stance, condemning violence “on both sides.” The oil price impact is existential for Cuba, which has received no oil since December and faces reserves near depletion. For oil exporters like Mexico, Colombia, and Ecuador, higher crude offers fiscal relief but at the cost of global demand destruction risk.
Regional Mood
March opens under multiple shocks. Milei’s pugilistic congressional address confirmed Argentina’s full alignment with Washington at a moment when the U.S.–Israel strike on Iran is fracturing the hemisphere’s diplomatic consensus. Mexico’s fragile security equilibrium faces its greatest test in years as the CJNG succession battle unfolds just four months before the World Cup. Brazil’s deadliest floods since 2024 are testing Lula’s disaster response ahead of an October election where he trails in key polls. Oil surging past $79 reshapes every economy in the region: for Cuba, already without supply since December, it means global prices are climbing even as reserves approach zero. Colombia’s March 8 congressional elections are six days away with Petro’s constituent assembly gambit polarizing the electorate. Kast’s inauguration on March 11 and Trump’s Miami summit on March 7 will test whether the region’s rightward shift translates into coordinated policy alignment.
Risk Snapshot
| Country | Risk Level | Key Driver |
|---|---|---|
| Argentina | ELEVATED | Milei combative address; 21,000 companies closed; CGT court challenge; MERVAL −19% from ATH; firm U.S. alignment on Iran |
| Brazil | ELEVATED | Floods: 70 dead incl. 13 children; Lula visits zone; oil price surge threatens inflation; election dead heat |
| Cuba | CRITICAL | Zero oil since Dec; reserves near depletion; Iran war drives global oil to $79+; Flotilla Mar 21; 20+ hr blackouts daily |
| Colombia | ELEVATED | Mar 8 elections 6 days away; Petro constituent assembly petition; COLCAP −2.67%; floods 251K+ affected |
| Mexico | ELEVATED | El Mencho killed Feb 22; CJNG succession war; 70+ dead incl. 25 Nat’l Guard; World Cup host city shut down; franchise model fragmentation risk |
| Peru | ELEVATED | 700+ districts under emergency; SENAMHI warns rain returns Mar 5–6; Apr 12 election; extortion protests |
| Venezuela | ELEVATED | Iran war complicates oil reform; 545 prisoners freed; IMF warns economy “quite fragile” |
| Chile | STABLE | Kast inauguration Mar 11; cautious Iran stance; IPSA consolidating; Communist Party boycotts inauguration |
Argentina
What Happened
- —Milei’s Combative State-of-the-Nation Address: President Milei opened the 144th ordinary session of Congress on Sunday with a 90-minute speech that was more political rally than policy address. He branded opposition lawmakers “thieves,” “murderers,” “ignorant,” and “parasites,” drawing cheers from packed supporter galleries. He singled out imprisoned former President Cristina Fernández de Kirchner, shouting “she’s a thief—one of the biggest in history.” He also mocked leftist deputies Myriam Bregman and Nicolás del Caño for “believing themselves the representative of workers when they can’t even muster five percent of the vote.” The FOPEA press watchdog found roughly one in seven of Milei’s X posts contains offensive or insulting language.
- —Strategic Alignment With Washington: Milei emphasized “the need to maintain alignment with the United States,” calling Trump a “key ally” and declaring “we have to create the century of the Americas. Make America Great Again.” He argued Argentina possesses the critical minerals demanded by the West and has strategic location with access to two oceans and proximity to Antarctica. Foreign Minister Kirno expressed unconditional support for the U.S.–Israel strikes on Iran. Milei celebrated the killing of Khamenei, consistent with Argentina’s long-standing grievance over the 1994 AMIA bombing attributed to Iran.
- —Economic Achievement and Social Cost: Milei touted the legislative victories of the extraordinary session—labor reform, lowering the criminal responsibility age, EU-Mercosur ratification, and initial approval of the glacier protection law. Annual inflation fell from 211% in 2023 to 31.5% in 2025 with consecutive fiscal surpluses for the first time since 2008. But the Buenos Aires Times reported over 21,000 companies have closed and 300,000 jobs have been lost during his presidency, and the speech came days after tyre manufacturer Fate shuttered. Milei attacked “privileged businessmen” surviving on state subsidies, calling them “complicit in the plundering of Argentines.”
- —Markets: The MERVAL closed Friday at 2,642,105 (−4.08%), now down approximately 19% from its January 28 all-time high. RSI at 33 signals deeply oversold territory. Monday’s session will test whether the Iran-driven oil surge and Milei’s congressional positioning trigger a recovery or further selling.
Why It Matters
Milei’s speech was a declaration of political supremacy—not a governance blueprint. Political scientist Juan Negri of Torcuato Di Tella University told the AP that Milei now commands “significant support and, through his allies, a parliamentary majority that seemed unprecedented in 2023.” The man who entered office as the third-largest bloc now dominates both chambers. His promise of a monthly reform package signals an acceleration of the structural transformation agenda.
The geopolitical alignment is equally consequential. Argentina’s unconditional support for the Iran strikes—rooted in the 1994 AMIA bombing—positions Buenos Aires as Washington’s most reliable Latin American partner in the emerging Middle East conflict. Combined with Milei’s critical minerals pitch and Antarctica positioning, Argentina is bidding for a strategic partnership that goes far beyond trade. The Trump–Milei meeting at the Miami summit on March 7 now carries elevated significance.
Key Watch
Monday market reaction to Iran war and Milei speech. CGT court challenge filing timeline. First monthly reform package details. Trump–Milei bilateral at Miami summit March 7. Whether MERVAL finds a floor or selling accelerates. Oil price passthrough to Argentine consumer prices.
Risk Level: ELEVATED
Brazil
What Happened
- —Flood Death Toll Reaches 70: The death toll from catastrophic flooding in Minas Gerais rose to 70 on Saturday—including 13 children—with three people still missing. President Lula visited Juiz de Fora on Saturday, embracing weeping residents and promising free houses to those who lost homes. Rainfall in Juiz de Fora has exceeded 760 mm in February—more than triple the monthly average. INMET warned of continued “great danger” in parts of Minas Gerais, Rio de Janeiro, and São Paulo. Climatologist Carlos Nobre attributed the extreme rainfall to a cold front over the “very warm” Atlantic Ocean. Cities Minister Jader Barbalho Filho said “the only alternative is investments in prevention.”
- —Iran War’s Oil Price Impact: Brent crude surged 9% to $79.41 on Sunday evening futures. Brazil is a net oil exporter but a net fuel importer for refined products. The Selic at 15% already reflects inflationary pressures; a sustained oil price spike would complicate the BCB’s March 17–18 Copom decision and strengthen the case for holding rates longer. The dollar strengthening on risk-off flows would also pressure the real, reversing the carry trade dynamic that drove the Ibovespa to record highs.
- —Election and Succession Watch: The October 2026 presidential race remains a dead heat: Flávio Bolsonaro at 46.3% versus Lula at 46.2%. The Haddad succession at the Finance Ministry remains unresolved. São Paulo Governor Tarcísio de Freitas appears close to deciding on a presidential run, according to Americas Quarterly, which would reshape the right-wing field.
- —Markets: The Ibovespa closed Friday at 188,787 (−1.16%). USD/BRL at 5.1300. February ended with a 0.9% monthly loss, snapping a six-month winning streak. Monday’s session will be dominated by Iran war repricing—oil exporters like Petrobras may benefit while rate-sensitive sectors face pressure from higher-for-longer expectations.
Why It Matters
The Minas Gerais disaster is now politically comparable to Rio Grande do Sul in 2024. Lula’s Saturday visit—hugging survivors, promising reconstruction—was a direct response to criticism that the initial R$3.4 million emergency release was grossly inadequate. With 13 children among the dead, the emotional weight of this disaster transcends the fiscal response. Every government action for the next eight months will be filtered through the October election lens.
The Iran war introduces a new variable into Brazil’s macro picture. As a major oil producer, Brazil benefits from higher crude prices through Petrobras dividends and royalties. But as a net fuel importer, it faces passthrough inflation risk. The combination of a hot U.S. PCE print on Friday and surging oil on Monday creates a dual inflationary shock that complicates the BCB’s forward guidance. Markets will watch whether the Ibovespa’s commodity-heavy index can decouple from the broader EM selloff.
Key Watch
Minas Gerais death toll and rescue operations. Ibovespa reaction to oil spike—Petrobras vs. rate-sensitive sectors. BCB March 17–18 Copom signaling. Haddad successor. Tarcísio de Freitas presidential decision. USD/BRL reaction to dollar strength.
Risk Level: ELEVATED
Mexico
What Happened
- —El Mencho Killed; CJNG Succession Crisis Begins: Mexican special forces, backed by U.S. intelligence, killed Nemesio “El Mencho” Oseguera Cervantes—leader of the Jalisco New Generation Cartel—on February 22 in Tapalpa, Jalisco. Eight CJNG members were killed in the raid. Within hours, the cartel launched coordinated retaliatory violence across 20 of Mexico’s 32 states: torching vehicles, erecting flaming roadblocks, and attacking government forces. At least 70 people died in the operation and its aftermath, including 25 National Guard troops killed in six separate attacks. The cartel’s right-hand man “El Tuli” was also killed the same day. El Mencho had a $15 million U.S. bounty and was considered the most powerful drug trafficker still free in Mexico.
- —Guadalajara Ghost Town; World Cup Concerns: Guadalajara—Jalisco’s capital and a host city for the 2026 FIFA World Cup—was effectively shut down for days. Over 1,000 visitors were stranded at the Guadalajara Zoo. Flights were suspended at Puerto Vallarta. Hotels advised guests to shelter in place. The U.S. Embassy issued security alerts for five states and activated a 24/7 crisis hotline. Governor Pablo Lemus activated “code red.” By late last week, services returned to normal and Jalisco lifted the code red—but the security implications for the tournament four months away are stark.
- —Succession and Fragmentation Risk: No clear successor exists. El Mencho’s son “El Menchito” is jailed in the United States on trafficking charges, breaking the family line. Analysts are divided: some point to stepson Juan Carlos González Valencia, who oversees the cartel’s paramilitary wing; former DEA official Mike Vigil identifies Luis Henríquez (“El Pelón”). CJNG’s franchise-based structure—operating across 40+ countries—means the business may survive, but the Wilson Center warns “internal fragmentation could trigger localized violence in Jalisco, Guanajuato, and Michoacán.” The Mexico Peace Index shows the homicide rate had been declining since 2019—this event could reverse those gains.
- —Markets: The IPC was the sole LatAm holdout on Friday, closing at 71,405.77 (+0.02%). Mexico’s oil-exporter status offers a buffer from Iran-driven crude spikes, though the CJNG aftermath adds domestic risk premium. Monday will test whether the market shrugs off the cartel disruption or reprices Jalisco-centric investment risk.
Why It Matters
This is the most significant blow against a Mexican cartel since the Calderón-era kingpin strategy. The operation demonstrated genuine improvement in Mexican intelligence and operational capacity. But the Calderón precedent is precisely why analysts are worried: that campaign produced hundreds of thousands of deaths as cartels fragmented into smaller, more violent groups. The number of criminal organizations involved in lethal violence rose from 2 in 2005 to 23 in 2023.
The World Cup dimension is inescapable. Guadalajara is scheduled to host tournament matches beginning in June. The fact that a CJNG retaliation wave could shut down a World Cup host city for days—stranding thousands, halting flights, forcing hotel lockdowns—will concentrate minds at FIFA, in the Sheinbaum government, and among international investors evaluating Mexican risk. President Sheinbaum praised the operation but faces the classic dilemma: strategic success now versus potential violence escalation in the months ahead.
Key Watch
CJNG succession dynamics—whether a single leader emerges or the cartel fractures. Rival cartels testing CJNG territorial control. Homicide data in Jalisco, Guanajuato, Michoacán over coming weeks. FIFA security assessment for World Cup venues. Sheinbaum government’s next moves against remaining CJNG leadership. U.S.–Mexico intelligence cooperation continuity.
Risk Level: ELEVATED
Regional Snapshot
Cuba
Cuba’s existential crisis enters its most dangerous phase. The country has received no oil since December. Oil reserves face potential depletion in March. The U.S.–Israel war on Iran has pushed Brent crude above $79—making any future oil procurement dramatically more expensive even if the blockade eases. Blackouts exceed 20 hours daily outside Havana. Nighttime satellite imagery shows light levels in eastern cities like Santiago de Cuba and Holguín have dropped 50% since January. The Nuestra América Flotilla targets Havana on March 21. Russia said the “situation around Cuba is escalating.” The speedboat shootout of February 25 continues to reverberate internationally.
Colombia
The March 8 congressional elections are now six days away. President Petro signed a constituent assembly petition on February 25 during a livestreamed cabinet meeting, 11 days before the vote—a move critics call a “political gambit” to boost left-wing turnout. The citizens’ committee needs 2+ million signatures (5% of the electoral roll). The COLCAP has fallen sharply in consecutive sessions—down 2.67% Friday after Thursday’s 4.13% plunge—with RSI at 36 signaling bearish momentum. Uribe’s Senate return bid is the conservative camp’s top headline. The presidential first round is May 31.
Iran War — LatAm Impact
The U.S.–Israel strikes on Iran (Feb 28) killed Supreme Leader Khamenei and triggered Iranian retaliation across the Gulf. Brent crude surged 9% to $79.41; WTI jumped 8% to $72.57 on Sunday futures. Three U.S. soldiers were killed. At least three tankers were damaged near the Strait of Hormuz. OPEC+ announced a 206,000 bpd production increase for April. Iran’s airspace is closed until March 3. Analysts project Brent in the $76–$84 range if contained, past $90 if Hormuz faces prolonged disruption. For LatAm, the impact splits: oil importers (Cuba, Chile, Central America) face inflationary shock; oil exporters (Mexico, Brazil, Colombia, Ecuador) gain fiscal breathing room but risk global demand destruction. Trump’s Miami summit March 7 is now effectively a wartime coordination meeting.
Peru
More than 700 districts remain under emergency declarations due to El Niño Costero flooding. SENAMHI forecasts intense rainfall returning March 5–6 after a brief break. ENFEN reports the coastal El Niño pattern could persist through November 2026. The general election is set for April 12. Crime and political instability top voter concerns. Extortion protests continue across multiple regions. PM Denisse Miralles remains in office.
Venezuela
The Iran war complicates Venezuela’s post-Maduro oil reform trajectory. The U.S. Treasury’s February 25 license allowing private-sector resale of Venezuelan oil to Cuba was designed for a pre-war energy landscape; surging global crude prices change the economics entirely. Acting President Delcy Rodríguez’s amnesty law has freed 545 of 800+ political prisoners. The IMF warned the economy is “quite fragile” with triple-digit inflation and 180% debt-to-GDP. Oil reform legislation aims to attract international investment, but wartime uncertainty may slow the process.
Chile
Kast’s inauguration on March 11 is nine days away. Chile’s government took a cautious stance on the Iran strikes, condemning violence “on both sides”—a sharp contrast with Argentina’s unconditional U.S. support. The IPSA fell 1.56% Friday to 10,878 with RSI at 44. The Communist Party will boycott the inauguration. Chile remains one of Latin America’s top-performing equity markets over three months despite the consolidation. As a major oil importer, Chile is exposed to sustained energy price increases from the Middle East conflict.
Markets at a Glance
| Index | Close | Change | Session |
|---|---|---|---|
| Ibovespa (B3) | 188,786.98 | −1.16% | (Fri Feb 27) |
| MERVAL (BYMA) | 2,642,105 | −4.08% | (Fri Feb 27) |
| IPC (BMV) | 71,405.77 | +0.02% | (Fri Feb 27) |
| COLCAP (BVC) | 2,222.92 | −2.67% | (Fri Feb 27) |
| IPSA (Santiago) | 10,877.74 | −1.56% | (Fri Feb 27) |
| Brent Crude (futures) | 79.41 | +8.88% | (Sun Mar 1) |
| WTI Crude (futures) | 72.57 | +8.00% | (Sun Mar 1) |
| S&P 500 | 6,878.88 | −0.43% | (Fri Feb 27) |
Market Note
Friday’s equity closes reflect the PCE inflation shock; Monday’s open will reprice for the Iran war. LatAm equity indices (from TradingView Tier 0 charts, Friday Feb 27 closes) entered the weekend already in broad selloff territory—MERVAL −4.08%, COLCAP −2.67%, IPSA −1.56%, Ibovespa −1.16%. Mexico’s IPC (+0.02%) was the sole holdout. Oil futures surging 8–9% on Sunday evening signal that Monday’s LatAm sessions will be dominated by energy sector repricing, safe-haven demand for gold and silver, and risk-off selling in rate-sensitive equities. Analysts project Brent in the $76–$84 range if the conflict remains contained, with $90+ possible if the Strait of Hormuz faces prolonged disruption. OPEC+’s 206,000 bpd April production increase provides marginal supply relief but is insufficient to offset a Hormuz closure.
The Week Ahead
| Date | Event | Significance |
|---|---|---|
| Mar 2 | LatAm markets open post-Iran war | First equity session repricing for Khamenei killing, oil surge, Milei address |
| Mar 2 | Purim (Jewish holiday) | CNN noted symbolic timing of Iran strikes ahead of Purim |
| Mar 5–6 | Peru: SENAMHI warns intense rainfall returns | 700+ districts already under emergency; El Niño Costero through Nov |
| Mar 7 | Trump hosts LatAm leaders (Miami) | Argentina, Paraguay, Bolivia, Ecuador, El Salvador, Honduras—now a wartime summit |
| Mar 8 | Colombia congressional elections | Petro era’s first electoral test; constituent assembly campaign; Uribe return bid |
| Mar 11 | Kast inauguration (Chile) | Cabinet composition; Iran policy positioning; Communist Party boycott |
| Mar 17–18 | BCB Copom rate decision (Brazil) | Selic at 15%; dual inflation shock from PCE + oil surge |
| Mar 21 | Nuestra América Flotilla targets Havana | Exile maritime protest; escalation risk after speedboat shootout |
| Apr 12 | Peru general elections | Presidential and congressional vote under interim government |
| Ongoing | Iran–U.S. military operations | Trump: strikes “will continue throughout the week or as long as necessary” |