Latin American Pulse for Saturday, February 21, 2026
Executive Summary
Read about Latin American Pulse for Saturday, February 21, 2026 on The Rio Times.
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U.S. Sanctions Chilean Minister Over China Cable 18 Days Before Kast Takes Power; Lula–Modi Bilateral Caps Largest Brazilian Delegation Ever Sent Abroad; Ecuador Seals First-Ever Trade Deal With Washington
This is part of The Rio Times’ comprehensive coverage of Latin American financial markets and economic developments.
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Executive Summary
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The Big Picture: The United States escalated its confrontation with Chile on Friday, imposing visa restrictions on Transport Minister Juan Carlos Muñoz and two other officials over their role in advancing a Chinese-linked undersea telecommunications cable. Secretary of State Rubio accused the outgoing Boric government of “undermining regional security,” explicitly framing the sanctions as a rebuke ahead of José Antonio Kast’s March 11 inauguration. Chile is the only Latin American country with a U.S. visa waiver—the diplomatic signal could not be louder.
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In New Delhi, Brazilian President Lula and Indian Prime Minister Modi held delegation-level talks at Hyderabad House on Saturday, capping a five-day state visit that brought 11 cabinet ministers, 300 business leaders, and 50 CEOs to India—the largest Brazilian diplomatic delegation ever sent to any country. Embraer signed an agreement to manufacture aircraft in India. The visit is rewriting the scale of Brazil’s engagement with Asia at a moment when Trump’s tariff regime is pushing middle powers to hedge.
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Ecuador quietly achieved what eluded it for decades: a bilateral trade deal with the United States. The Agreement on Reciprocal Trade, substantially concluded on February 13 and finalized this week, eliminates the 15% surcharge on roughly half of Ecuador’s non-petroleum exports—a $3.2 billion basket including bananas, cocoa, flowers, and minerals. It is the first market-access trade agreement ever signed between the two countries.
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Regional Mood
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The week’s final act reshuffled the hemisphere’s diplomatic map. Washington sanctioned Chilean officials, rewarded Ecuador with a trade deal, and endorsed Argentina’s reform program—all in the same five days. The message to incoming and sitting governments is clear: alignment with U.S. security priorities unlocks economic benefits; ties to Beijing carry costs. Meanwhile, Lula’s India gambit signals that Brazil is building alternatives rather than choosing sides.
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Risk Snapshot
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| Country | Key Driver | Risk Level |
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| Chile | U.S. visa sanctions on Transport Minister and two officials over China cable; Kast inauguration 18 days out; Rubio attacks Boric legacy | HIGH |
| Brazil | Lula–Modi bilateral today; largest-ever delegation; Embraer India deal; October elections forming | ELEVATED |
| Ecuador | U.S.–Ecuador trade deal finalized; zero tariffs on $3.2B exports; Guayaquil mayor arrested Feb 10; security crisis continues | ELEVATED |
| Peru | Balcázar summoned to trial one day after taking office; April 12 election 50 days out; markets unfazed | HIGH |
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Chile
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Washington Sanctions Transport Minister Over China Undersea Cable; Rubio Attacks Boric Legacy 18 Days Before Kast Takes Power
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What Happened
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- —Visa Sanctions: The State Department announced Friday that it has imposed visa restrictions on Chilean Transport Minister Juan Carlos Muñoz and two other officials for activities that “compromised critical telecommunications infrastructure and undermined regional security.” Their U.S. visas have been revoked and their immediate family members are barred from entry. The sanctions target Chile’s pursuit of a Chinese-linked undersea cable project connecting South America and Asia.
- —Diplomatic Escalation: Secretary Rubio’s statement was unusually pointed, declaring that the outgoing Boric government’s “legacy shall be further tarnished by actions that undermine regional security.” He explicitly signaled Washington looks forward to working with Kast’s incoming administration. Chile is the only Latin American country whose citizens enjoy visa-free travel to the United States, making the targeting of government officials an extraordinary diplomatic rebuke.
- —Chile’s Response: Minister Muñoz defended the cable projects, noting that one is co-financed by Google’s parent company Alphabet and runs from Chile to Australia. He stressed that Chile does not “discriminate with respect to the origins of different projects” and evaluates them on their merits, adding that no project threatening national sovereignty would be approved.
- —Markets: IPSA rose 0.42% to 10,855.08 (Fri), seemingly unperturbed by the late-breaking sanctions news.
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Why It Matters
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The sanctions lay bare the collision between Chile’s economic reality and Washington’s security demands. China is Chile’s largest trading partner, purchasing the bulk of its copper exports. The relationship has deepened across infrastructure, digital connectivity, and investment over the past decade—precisely the areas the U.S. now frames as security threats.
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The timing is deliberate. By sanctioning Boric-era officials with just 18 days until Kast’s inauguration, Washington is drawing a line before the transition: the incoming right-wing government, which has signaled strong U.S. alignment, receives a clean slate and a clear incentive structure. Kast visited Argentina’s Milei as his first foreign engagement after winning the December 14 election and has pledged to cut $6 billion in public spending, deploy military to violent areas, and enforce mass deportation of undocumented migrants.
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For the broader region, this is a template. Washington is increasingly using targeted personal sanctions—not trade penalties—to shape infrastructure and technology decisions in Latin America, particularly around Chinese telecommunications investments.
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Key Watch
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Boric government’s formal response. Whether Kast distances himself from the cable projects post-inauguration. Impact on broader Chile–China commercial relationship. Whether similar sanctions extend to other LatAm countries with Chinese infrastructure ties.
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RISK: HIGH
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Brazil
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Lula and Modi Hold Delegation-Level Talks in New Delhi; Embraer Deal, Critical Minerals, and AI Cooperation Anchor Largest-Ever Brazilian Mission Abroad
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What Happened
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- —Historic Bilateral: Lula received a ceremonial welcome with Guard of Honour at Rashtrapati Bhavan on Saturday, followed by meetings with President Murmu, Vice President Radhakrishnan, and External Affairs Minister Jaishankar. He then held delegation-level talks with Modi at Hyderabad House. Brazil’s ambassador described the relationship as reaching “a new level historically” and said the two leaders “have become friends.” Lula paid tribute at Mahatma Gandhi’s memorial at Rajghat before the talks.
- —Delegation Scale: The mission includes 11 cabinet ministers, more than 300 business leaders, and 50 CEOs—the largest Brazilian delegation ever sent abroad. Ministerial counterpart meetings are running in parallel. A business forum is convening Brazilian and Indian executives across defence, energy, pharmaceuticals, critical minerals, and AI. Brazilian exports to India hit $6.9 billion in 2025, the highest in two decades.
- —Embraer and AI: Ahead of the bilateral, Embraer signed an agreement to manufacture aircraft in India, and Brazil’s health minister announced funding to import Indian components for AI-powered hospitals. At the AI Impact Summit earlier this week, Lula urged global governance of artificial intelligence and warned that unchecked AI expansion could deepen inequality. More than 110 countries and 20 heads of state participated.
- —Markets: Ibovespa rose 0.90% to 190,238.88 (Fri), extending its rally and approaching the all-time high of 189,699 set on February 11—which it has now surpassed.
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Why It Matters
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This visit is not routine diplomacy. Brazil and India are the two largest economies of the Global South, both BRICS founding members, both navigating Trump’s tariff regime, and both hedging against great-power competition. The delegation’s scale—dwarfing anything Lula has brought to a G20 or bilateral in this term—signals that India has moved from a diplomatic courtesy to a strategic priority.
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The practical agenda centers on critical minerals and rare earths, where Brazil’s reserves complement India’s processing ambitions. Both countries are seeking to break Chinese dominance of these supply chains without falling into exclusive U.S. dependency. The Embraer deal is the most visible outcome so far, potentially opening India’s defence and commercial aviation markets to Brazilian manufacturing.
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Domestically, the tour serves Lula ahead of October’s elections. After the political embarrassment of a Carnival samba tribute to him finishing last and being relegated in Rio, the India visit projects presidential stature. Next stop is South Korea, another technology powerhouse seeking to upgrade ties with Brazil.
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Key Watch
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Joint statement and signed agreements from the bilateral. Embraer India manufacturing timeline. Critical minerals cooperation framework. South Korea visit (next week). Copom rate decision March 17–18.
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RISK: ELEVATED
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Live Market IntelligenceLatin America — Cross-Market Board
Rio Times · Live Market Intelligence
Latin America — Cross-Market Board
+0.76%
173,295
+0.76%
67,226
-0.28%
10,762
+0.52%
3,123,411
+0.88%
2,286.19
+1.09%
55,499.07
+1.21%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 173,295 | +0.76% | +26.39% | 171,990 | 173,964 | 171,124 | — |
| IPSA | 10,762 | +0.52% | — | 10,706 | 10,810 | 10,644 | 1,721,540,424 |
| IPC MEX | 67,226 | -0.28% | +16.97% | 67,416 | 67,668 | 66,911 | 130,375,852 |
| MERVAL | 3,123,411 | +0.88% | +53.19% | 3,096,068 | 3,163,705 | 3,090,173 | — |
| COLCAP | 2,286.19 | +1.09% | — | 9.04 | 9.05 | 9.02 | 4,133 |
| BVL PERÚ | 55,499.07 | +1.21% | — | — | — | — | — |
| USD/BRL | 5.17 | -0.04% | -6.97% | 5.17 | 5.17 | 5.17 | — |
| EUR/BRL | 5.88 | -0.38% | -9.33% | 5.91 | 5.92 | 5.87 | — |
| USD/MXN | 17.50 | -0.06% | -7.41% | 17.51 | 17.58 | 17.42 | — |
| USD/CLP | 921.85 | +0.00% | -1.61% | 921.85 | 921.85 | 921.85 | — |
| USD/COP | 3,437 | -0.25% | -15.26% | 3,446 | 3,437 | 3,437 | — |
| USD/PEN | 3.41 | -0.47% | -4.81% | 3.42 | 3.42 | 3.40 | — |
| USD/ARS | 1,477 | -0.02% | +24.12% | 1,477 | 1,477 | 1,460 | — |
| USD/UYU | 40.22 | +2.10% | +0.83% | 39.39 | 40.22 | 40.13 | — |
| USD/PYG | 6,084 | +1.66% | -22.68% | 5,985 | 6,088 | 6,084 | — |
| USD/BOB | 6.86 | +1.88% | +1.87% | 6.73 | 6.86 | 6.85 | — |
| USD/DOP | 59.28 | +2.37% | +0.14% | 57.91 | 59.36 | 58.37 | — |
| USD/CRC | 450.59 | +1.75% | -8.68% | 442.84 | 452.50 | 450.59 | — |
Ecuador
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First-Ever U.S.–Ecuador Trade Deal Eliminates Tariffs on $3.2 Billion in Exports; Noboa Frames Agreement as Security Partnership
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What Happened
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- —Trade Deal Finalized: The U.S. Trade Representative announced on February 13 that Washington and Quito had substantially concluded negotiations on an Agreement on Reciprocal Trade. The deal eliminates the 15% surcharge Trump imposed in July 2025 on approximately half of Ecuador’s non-petroleum exports—a basket worth roughly $3.2 billion that includes bananas, cocoa, flowers, blueberries, avocados, tuna, dragon fruit, gold, and copper. Trade Minister Luis Alberto Jaramillo called it a “great achievement,” noting Ecuador outperformed Malaysia, which secured zero tariffs on only 12% of its exports.
- —Ecuador’s Concessions: In exchange, Ecuador will reduce or eliminate tariffs on U.S. machinery, health products, chemicals, motor vehicles, and agricultural products. It will reform its import licensing system, end the Andean Price Band System on many agricultural goods, and commit to labor rights enforcement and a prohibition on goods produced by forced labor. The agreement is framed as a “first step” toward a full free trade agreement.
- —Security Dimension: President Noboa told supporters the agreement extends beyond economics into joint security cooperation against narcotrafficking. Ecuador has been in a declared “internal armed conflict” since January 2024. The Guayaquil mayor and two of his brothers were arrested on February 10 in a money-laundering investigation, underscoring the depth of organized crime’s penetration of the political class.
- —Regional Context: Ecuador joins Argentina, El Salvador, and Guatemala in signing reciprocal trade deals with the Trump administration. The pattern is consistent: Washington lowers tariffs in exchange for market access, IP protections, and security alignment. A separate Ecuador–Colombia trade spat that erupted in January—with dueling 30% tariffs—remains unresolved.
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Why It Matters
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For decades, Ecuador sold to the United States under unilateral preferences Washington could revoke at will. This agreement replaces that vulnerability with a binding bilateral framework. Bananas and cocoa alone account for roughly 35% of Ecuador’s export value to the U.S., so the tariff elimination is economically significant for an agricultural economy fighting both gang violence and a fiscal squeeze.
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The broader signal matters as much as the economics. The Trump administration is building a web of bilateral deals across Latin America that rewards alignment and punishes resistance. Countries that cooperate on security, counter-narcotics, and China policy get trade access. Noboa, governing under a state of emergency with military on the streets, fits this template perfectly. The shrimp sector—Ecuador’s largest agricultural export—remains excluded, leaving a major bargaining chip for a potential full FTA.
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Key Watch
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Signing ceremony date. Shrimp sector negotiations. Ecuador–Colombia tariff dispute resolution. Guayaquil mayor case proceedings. Security situation ahead of potential 2027 elections.
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RISK: ELEVATED
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Peru
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Balcázar Summoned to Trial One Day After Taking Office; Eighth President in a Decade Faces Court Before He’s Appointed a Cabinet
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What Happened
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- —Trial Summons: Prosecutors summoned Balcázar, 83, to trial on Friday—one day after he took office—for alleged misappropriation of approximately $600,000 from the Lambayeque Bar Association during his time as dean. The Lambayeque Bar permanently expelled him in August 2022 and formally opposed his candidacy for the presidency of Congress, the position that placed him in the line of succession after Jerí’s removal.
- —Accumulating Investigations: Beyond the bar association case, Balcázar faces ongoing investigations for judicial misconduct, fraud, identity impersonation, and bribery. He was removed from the Supreme Court bench in 2011 and formally disbarred in 2022. In 2023 he drew backlash for publicly arguing that child marriage without violence could benefit a girl’s development. He is Peru’s oldest-ever president and the fourth to hold the office during the 2021–2026 term, after Castillo, Boluarte, and Jerí.
- —Pledges and Positioning: Despite the legal cloud, Balcázar told journalists he would guarantee “a peaceful and transparent democratic and electoral transition, leaving no room for doubt.” He pledged to continue macroeconomic policy unchanged and refocus the security apparatus on organized crime, particularly the Tren de Aragúa gang. The April 12 election is 50 days away with 34 candidates; López Aliaga leads polls.
- —Markets: Reuters analysis noted that Peru’s commodity-driven economy, credible central bank, and 32% debt-to-GDP ratio continue to insulate markets from political churn. Copper prices remain supportive.
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Why It Matters
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A president summoned to trial on his first full day in office would be extraordinary anywhere. In Peru, it is merely the latest chapter in a decade of institutional dysfunction that has produced eight presidents, four impeachments, and a revolving door between the palace and the courtroom. Balcázar’s controversial background gives the opposition immediate ammunition for removal proceedings—though even Peru’s Congress might hesitate to unseat yet another president before the April election.
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The deeper story is Peru’s remarkable economic resilience despite governance chaos. Mining output, a credible central bank, and disciplined fiscal management have kept the country attractive to investors even as political instability deters long-term commitments. Every decision Balcázar makes in the next 50 days will be read through an electoral lens, constraining any policy ambition.
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Key Watch
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Cabinet appointments. Whether opposition launches removal proceedings. Trial schedule. April 12 campaign dynamics. López Aliaga’s policy platform.
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RISK: HIGH
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Regional Snapshot
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Panama: CK Hutchison called on Panama’s executive branch Thursday to open roundtable talks to keep operating the Balboa and Cristóbal ports, warning that an abrupt handover to Maersk’s APM Terminals would cause “chaos overnight.” Spokesperson Alejandro Kouruklis said the Hong Kong firm is prepared to “renegotiate absolutely everything” in the contract Panama’s Supreme Court struck down in January. CK Hutchison has filed international arbitration with the ICC in Paris and warned Maersk of legal action. The two terminals handle 38% of Panama’s container traffic and sit at the center of a U.S.–China proxy battle over critical infrastructure.
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Argentina: With labor reform passed by Deputies 135–115 early Friday, the focus now shifts to the Senate, which must vote on the amended text before the February 28 extraordinary sessions deadline. Separately, the FATE tire factory closure—920 jobs lost after 85 years of production—has become a symbol of deindustrialization under Milei. Workers occupied the plant, union leader Alejandro Crespo was detained, and the UIA industrial chamber condemned the shutdown. Tire imports now account for 75% of the domestic market, mostly from China, with prices down 42%. MERVAL rose 1.08% to 2,869,745.80 (Fri).
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Colombia: March 8 legislative elections are now 15 days away. The security deployment announced by Defence Minister Pedro Sánchez remains the key variable, with 81 municipalities at extreme risk. No major new violence was reported in the past 48 hours, but an AFP feature published Wednesday on indigenous candidate Esneyder Gómez—campaigning in Cauca rebel territory under armed escort—offered a vivid portrait of what democratic participation looks like in areas the state barely controls. The Petro–Rodríguez Cúcuta summit date remains unconfirmed.
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Paraguay: The central bank surprised analysts Friday by cutting its benchmark rate 25 basis points to 5.50%—the second consecutive cut after January’s reduction. Policymakers said inflation will remain below the 3.5% target most of 2026 and that monetary policy now has a “neutral stance.” The easing cycle signals confidence in macroeconomic stability. President Peña returned from the Board of Peace summit in Washington where he joked Paraguay would support the U.S. “except on June 12” when they face each other in the World Cup.
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Cuba: A separate blackout hit half of Havana on Friday after an automatic frequency shutdown struck substations across Plaza, Príncipe, Tropical, and Rincón. The General Director of Electricity blamed a primary fault at the CUJAE substation. This comes on top of Wednesday’s national blackout that cut 61% of the country’s power. Bloomberg satellite analysis shows nighttime light in Santiago and Holguín has fallen 50% from historical averages since January. Aeroflot’s last scheduled Cuba service runs February 24.
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Venezuela: Implementation of the amnesty law signed February 13 continues. As of February 17, 444 political prisoners had been released out of an estimated 800-plus held before January. The Petro–Rodríguez Cúcuta bilateral summit remains the next major diplomatic watch for Caracas.
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Uruguay: The air force took delivery of its first two Embraer A-29 Super Tucano light attack aircraft on February 18, beginning a six-aircraft modernization that replaces 43-year-old Cessna A-37 jets. The deal reinforces Embraer’s regional footprint at the same time the company is expanding into Indian manufacturing. Separately, offshore seismic exploration by Viridien (CGG Services) is set to begin this month in Uruguayan waters.
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Markets at a Glance
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| Index | Close | Change | Context |
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| Ibovespa (Fri) | 190,238.88 | +0.90% | New all-time closing high; Lula in India |
| MERVAL (Fri) | 2,869,745.80 | +1.08% | Consolidating post-reform gains; Senate vote next week |
| IPC (Fri) | 71,307.34 | +0.65% | Recovery; USMCA and tariff uncertainty persist |
| IPSA (Fri) | 10,855.08 | +0.42% | Modest gain; U.S. sanctions broke after close |
| S&P 500 (Fri) | 6,906.47 | +0.65% | Broad rally; Supreme Court tariff ruling |
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Source: Yahoo Finance (Tier 3) for Ibovespa, MERVAL, IPC, IPSA, S&P 500. COLCAP data pending TradingView confirmation. All equity figures reflect Friday, February 20, 2026 closing sessions. TradingView (Tier 0) charts not yet provided for this session—figures will be updated upon receipt.
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The Week Ahead
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| Date | Event |
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| Mon Feb 23 | Argentina: Senate return window opens for labor reform final vote • Chile: Markets reopen after U.S. sanctions—IPSA reaction watch |
| Tue Feb 24 | Cuba: Aeroflot last scheduled Cuba service • Brazil: Lula begins South Korea visit |
| Tue–Fri Feb 25–27 | CARICOM: Leaders’ summit |
| Fri Feb 28 | Argentina: Extraordinary sessions deadline—labor reform must pass Senate |
| Sat Mar 7 | Trump hosts Latin American leaders in Miami |
| Sun Mar 8 | Colombia: Legislative elections under heightened security |
| Wed Mar 11 | Chile: Kast inauguration |
| Mar 17–18 | Brazil: BCB Copom rate decision (50bp cut to 14.50% expected) |
| Mar 21 | Cuba: Nuestra América Flotilla targets Havana |
| Apr 12 | Peru: General election (first round) |
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Related: Brazil Morning Call | Global Economy Briefing