Brazil’s Lower House Approves EU-Mercosur After 25 Years; Ecuador Locks In Zero Tariffs on Half Its US Exports; Nvidia’s $68 Billion Quarter Resets Global Risk Appetite
Executive Summary
The Big Picture: Brazil’s Chamber of Deputies approved the EU-Mercosur free trade agreement on Wednesday—clearing the most important legislative hurdle in the largest free trade zone ever negotiated. The pact, signed in Asunción on January 17 after 25 years of talks, covers more than 700 million consumers and commits both blocs to gradual tariff elimination on over 90% of goods. Argentina’s lower house had already passed the agreement on February 12, making Brazil the second Mercosur country to advance ratification. The Brazilian Senate vote comes next. Uruguay and Paraguay are expected to follow within weeks.
Separately, Ecuador finalized a landmark bilateral trade deal with the United States on February 15, eliminating the 15% reciprocal tariff on approximately half of Ecuador’s non-petroleum exports—a basket worth roughly $3.2 billion including bananas, cocoa, flowers, and minerals. It is the first bilaterally negotiated market-access agreement in the history of the two countries’ trade relationship. Quito simultaneously maintains a 30% security tariff on Colombian imports, an extraordinary unilateral move that echoes Trump’s own tariff playbook.
After the bell Wednesday, Nvidia delivered a record $68.1 billion quarter and guided Q1 to $78 billion. The S&P 500 closed at 6,946.13 (+0.81%). Chile’s IPSA surged 1.29% to 11,133—its best session in weeks—on copper-linked AI optimism. The MERVAL dipped 0.45% ahead of today’s Argentine Senate labor reform vote. Cuba’s overnight speedboat shootout, which killed four off Villa Clara, dominates the Caribbean headline cycle.
Regional Mood
Latin America’s trade architecture is being redrawn on two fronts simultaneously. The EU-Mercosur deal offers a European counterweight to Washington’s bilateral tariff offensive—giving Brazil, Argentina, Uruguay, and Paraguay diversification leverage at exactly the moment Trump’s Section 122 tariff constrains hemispheric trade. Ecuador’s US deal, meanwhile, shows the other path: align with Washington, open your market, and get the 15% lifted. These two models—European diversification versus American alignment—will define every Latin American trade negotiation for the next decade.
Risk Snapshot
| Country | Key Driver | Risk Level |
|---|---|---|
| Cuba | Florida speedboat shootout overnight; 4 killed, 6 wounded; Rubio investigating; Florida AG probe; US-Cuba escalation risk | CRITICAL |
| Mexico | El Mencho aftermath Day 6; CJNG succession unresolved; Wilson Center warns fragmentation risk; World Cup 4 months out | CRITICAL |
| Brazil | EU-Mercosur lower house approved; Senate vote next; Ibovespa consolidating after ATH; Copom Mar 17–18 | ELEVATED |
| Argentina | Senate floor vote on labor reform TODAY; extraordinary sessions expire Saturday; Milei March 1 speech | HIGH |
| Ecuador | US trade deal concluded; 30% tariff on Colombia; 9,000 homicides in 2025; Noboa state of emergency | HIGH |
Brazil
Lower House Approves EU-Mercosur Free Trade Agreement After 25 Years of Negotiations; Senate Vote Next; World’s Largest Free Trade Zone Inches Closer to Reality
What Happened
Brazil’s Chamber of Deputies approved the EU-Mercosur free trade agreement on Wednesday, sending the text to the Senate for final ratification. The deal, signed in Asunción on January 17, culminates 25 years of negotiations and creates the world’s largest free trade zone, spanning more than 700 million consumers across both blocs.
Under the agreement, Mercosur will eliminate tariffs on 91% of European goods within 15 years; the EU will lift tariffs on 95% of Mercosur goods within 12 years. Argentina became the first Mercosur country to pass the accord through its lower house on February 12. Uruguay and Paraguay have both submitted the text to their parliaments and are expected to complete ratification within weeks.
On the European side, the timeline is less certain. The European Parliament voted narrowly on January 21 to ask the Court of Justice to assess whether the deal can be provisionally applied before full member-state ratification—a move that could delay implementation by up to two years. However, the European Commission has left the door open to provisional application once at least one Mercosur country completes its domestic process.
Why It Matters
The EU-Mercosur deal gives Brazil and its neighbours a structural counterweight to Washington’s tariff offensive. While Trump’s Section 122 tariff constrains hemispheric trade, Europe is offering gradual market access with enforceable environmental and labour standards. For Brazilian agriculture—the world’s largest beef, soy, and sugar exporter—the deal unlocks preferential access to the EU’s 450 million consumers.
The Ibovespa dipped just 0.13% Wednesday to 191,247, consolidating after Tuesday’s all-time high of 191,490. The real held flat at 5.1246 per dollar. Markets may be underpricing the structural significance: if provisional application begins before the EU court ruling, Brazil could have preferential access to both the US (via Section 122 exemptions) and Europe simultaneously—a rare dual-market advantage in the current tariff environment.
Key Watch
Brazilian Senate timeline. EU Court of Justice ruling on provisional application. Uruguay and Paraguay ratification pace. French agricultural opposition. Copom rate decision March 17–18 (100bp hike expected to 16.00%).
RISK: ELEVATED
Ecuador
US-Ecuador Trade Deal Eliminates 15% Tariff on $3.2 Billion in Exports; Noboa Imposes 30% Security Tariff on Colombia; State of Emergency Remains Active
What Happened
The United States and Ecuador substantially concluded negotiations for an Agreement on Reciprocal Trade on February 15, with the formal signing expected in coming weeks. The deal eliminates the 15% US tariff 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. Ecuador joins Argentina, El Salvador, Guatemala, Taiwan, and others in Trump’s expanding web of bilateral trade pacts.
In exchange, Ecuador committed to reducing tariffs on US machinery, health products, ICT goods, chemicals, and agricultural products. Quito also agreed to reform import licensing, protect labour rights, enforce environmental laws, and adopt digital trade standards. AEBE, Ecuador’s banana exporters’ association, backed the deal as essential to protecting jobs and investment.
Simultaneously, President Noboa maintains a 30% “security tariff” on Colombian imports, imposed February 1 over Bogotá’s alleged failure to contain drug trafficking and illegal mining at the border. Ecuador closed 2025 with a record 9,000 homicides. Noboa’s 60-day state of emergency across nine provinces remains active.
Why It Matters
Ecuador’s dual trade strategy is the starkest example of Washington alignment in the hemisphere. Noboa has embraced Trump’s security-first posture, hosted Homeland Security Secretary Noem, backed the failed referendum on US military bases, and now secured the first bilateral market-access agreement in the two countries’ history. The 30% Colombia tariff mirrors Trump’s own punitive approach and signals that smaller Latin American nations are learning to weaponize trade policy.
For global investors, Ecuador offers a test case: can aggressive US alignment deliver both security improvement and economic growth simultaneously? The record homicide toll suggests the first goal remains elusive even as the trade architecture solidifies.
Key Watch
Formal signing timeline. Colombia’s response to 30% tariff ahead of March 8 elections. Ecuador state of emergency renewal. Shrimp and tuna sectors still under 15% US tariff. World Cup qualifier March 26 in Guadalajara (Bolivia vs Suriname).
RISK: HIGH
Nvidia & Global Markets
$68.1 Billion Quarter Beats by $2 Billion; Q1 Guidance of $78 Billion Quashes AI Bubble Fears; S&P 500 at 6,946; IPSA Surges 1.29% on Copper Optimism
What Happened
Nvidia reported record fiscal Q4 revenue of $68.1 billion, up 73% year-on-year and 20% quarter-on-quarter, beating the $66.2 billion consensus by nearly $2 billion. Adjusted EPS came in at $1.62 versus $1.53 expected. Data center revenue climbed 75% to $62.3 billion. Gross margins held at 75.2%.
Q1 FY2027 guidance of $78 billion assumes zero China data center revenue. Total supply commitments nearly doubled to $95.2 billion. CFO Colette Kress confirmed Vera Rubin samples shipped to customers this week. Full-year FY2026 revenue reached $215.9 billion, up 65%.
Why It Matters
Combined hyperscaler capex is approaching $700 billion this year. For Latin America, this sustains commodity demand (copper, lithium, energy), keeps US equity strength pulling emerging market flows, and validates the risk-on environment. Chile’s IPSA surged 1.29% Wednesday—its best session in weeks—partly on copper sentiment. Thursday’s US open will set the global tone.
Key Watch
Thursday US market open. Memory supply constraints flagged for gaming. GTC San Jose in March. China revenue not in guidance—pure upside if it materializes.
SIGNAL: RISK-ON
Regional Snapshot
Cuba
Cuban border forces killed four and wounded six aboard a Florida-registered speedboat off Villa Clara province Wednesday. Havana says all ten passengers were armed Cuban nationals with US residency attempting an “infiltration for terrorist purposes.” Rubio said the US is investigating. Florida AG launched a state probe. Rep. Giménez called it a “massacre.” Most serious US-Cuba incident in years. Energy deficit exceeds 1,700 MW. Nuestra América Flotilla targets Havana March 21.
Argentina
Senate floor vote on labor reform expected today—the final step before Milei can sign Argentina’s most significant labour overhaul since 1983. Deputies passed it 135–115 on Feb 20 after stripping Article 44. Passage is near-certain; MERVAL −0.45% to 2,799,876, pricing it as a formality. Extraordinary sessions expire Saturday. Milei’s March 1 state-of-the-nation address will celebrate if signed. CGT legal challenge unlikely to succeed.
Mexico
El Mencho aftermath Day 6. Wilson Center published its first institutional assessment: the operation was a “meaningful assertion of state authority,” but CJNG’s spectacular violence is “organizationally embedded” and fragmentation may trigger localized conflict. Schools and airports open in Guadalajara. IPC +0.30% to 71,144. World Cup four months out.
Bolivia
La Paz is negotiating a $3.3 billion IMF programme—the largest in Bolivian history—as President Rodrigo Paz works to stabilize the deepest economic crisis in four decades. Fitch upgraded Bolivia to CCC in January. Ex-president Morales resurfaced in the Chapare after seven weeks, denying he fled the country. Chikungunya outbreak in Santa Cruz: 3 deaths, 3,000 cases.
Chile
IPSA surged 1.29% to 11,133—strongest session in weeks—on copper-linked AI optimism ahead of Nvidia earnings. Kast inauguration 12 days out on March 11. Rubio expected to attend. Incoming administration’s pro-US orientation and “Border Shield” security pledge continue to underpin investor confidence.
Peru
PM Miralles’s cabinet must obtain a congressional confidence vote within 30 days. De Soto told reporters his replacement proves “Venezuelization.” Miralles reportedly told Bloomberg in January that Peru should soften its 2026 fiscal target. April 12 elections 45 days out; 34 candidates contest the presidency.
Markets at a Glance
| Index | Close (Wed) | Change | Context |
|---|---|---|---|
| Ibovespa | 191,247.46 | −0.13% | Consolidating after Tue ATH; EU-Mercosur passed lower house |
| MERVAL | 2,799,876.06 | −0.45% | Labor reform vote today; passage priced in |
| IPC | 71,144.35 | +0.30% | El Mencho stabilization; Day 6 |
| COLCAP | 2,382.41 | −0.56% | Ecuador 30% tariff overhang; Mar 8 elections 9 days out |
| IPSA | 11,133.28 | +1.29% | Best session in weeks; copper/AI optimism; Kast Mar 11 |
| S&P 500 | 6,946.13 | +0.81% | Nvidia beat after bell; $78B Q1 guidance |
| Gold (XAU/USD) | 5,187.11 | +0.45% | Safe-haven flows; Cuba incident may amplify |
| Silver (XAG/USD) | 88.338 | −0.94% | Pullback after Tue +3.86% surge |
| BTC/USD | 68,156 | +0.24% | Stabilizing near 68K; below 200-day MA |
| USD/BRL | 5.1246 | 0.00% | Flat; real at multi-month strength |
Source: TradingView (Tier 0) for Ibovespa, MERVAL, IPC, COLCAP, IPSA, USD/BRL, Gold, Silver, BTC — charts provided by editor Feb 26, 07:25–07:26 UTC. S&P 500 from CNBC/Yahoo Finance. Equity indices reflect Wednesday, February 25, 2026 closing sessions. Gold, Silver, BTC, USD/BRL reflect intraday Feb 26 snapshots.
The Week Ahead
| Date | Event |
|---|---|
| Thu Feb 27 | Argentina Senate floor vote on labor reform • US markets react to Nvidia earnings • Cuba speedboat fallout |
| Sat Feb 28 | Argentina extraordinary sessions deadline |
| Sun Mar 1 | Milei state-of-the-nation speech (Congress ordinary sessions open) |
| Sat Mar 7 | Trump hosts LatAm leaders in Miami |
| Sun Mar 8 | Colombia: Legislative elections + presidential primaries |
| Wed Mar 11 | Chile: Kast inauguration |
| Mar 17–18 | BCB Copom rate decision (100bp hike expected to 16.00%) |
| Mar 21 | Nuestra América Flotilla targets Havana |
| Apr 12 | Peru general election (first round) |
| Jul 24 | Section 122 tariff expires (150-day limit) |