Kast Inaugurated Tomorrow as Washington and Beijing Both Send Envoys to Santiago; Sheinbaum Draws Sovereignty Line After Doral Mockery; Colombia’s COLCAP Surges 2.3% as Post-Election Field Crystallizes; Milei Opens Argentina Week in New York; Hormuz Crisis Keeps Oil Volatile Above $90
Executive Summary
The Big Picture: Latin America’s political calendar is moving at sprint pace: Chile inaugurates its most right-wing president since Pinochet tomorrow, Colombia’s post-election congressional map confirms no bloc holds a majority ahead of May’s presidential race, Mexico’s Sheinbaum drew a firm sovereignty line after Trump’s Doral mockery, and Milei launched a Wall Street investment blitz from New York. All of this unfolds under the shadow of the Hormuz crisis, which briefly sent Brent past $100 on Monday before Trump’s threats against Iran and G7 reserve pledges pulled it back to the low-to-mid $90s. The oil shock remains the dominant macro variable—compressing fiscal space in net-importing economies, boosting Petrobras and Vaca Muerta producers, and injecting stagflation risk into central bank calculations from Brasília to Mexico City—but the week’s defining stories are political, not commodity-driven.
Mexico’s President Sheinbaum responded to Trump’s Doral mockery at her Monday mañanera, declaring “we have said no, and we proudly continue to say no” to U.S. military operations on Mexican soil. She cited data showing fentanyl seizures at the border have fallen approximately 40% since Trump began his second term and pivoted to Washington’s responsibility for illegal arms flowing south—75% of cartel weapons originate in the U.S., per State Department data she cited. Her tone was measured but firm, rejecting the Shield of the Americas military framework while affirming bilateral cooperation on Mexico’s own terms. The IPC fell 0.63% to 66,890 on Monday as cartel-related uncertainty and the oil shock weighed on sentiment.
Chile’s José Antonio Kast will be inaugurated as president tomorrow in Santiago, completing the Southern Cone’s rightward sweep. The U.S. delegation will be led by Deputy Secretary of State Christopher Landau—not Secretary Rubio as previously expected—who will meet with Kast to “reset the U.S.-Chile relationship.” In a notable diplomatic signal, China announced that Xi Jinping’s special envoy, Housing Minister Ni Hong, will also attend. The Doral summit’s “secure infrastructure” protocols and the China Mobile submarine cable dispute make the inauguration a live test of Kast’s balancing act between Washington and Beijing. The IPSA rose 1.11% to 10,429.
Colombia’s COLCAP surged 2.31% to 2,226 on Monday—the strongest single-session gain among tracked indices—as markets digested Sunday’s election results. The Historic Pact took approximately 25 Senate seats to the Democratic Center’s 17, confirming a fragmented Congress with no majority for any bloc. Paloma Valencia’s decisive right-wing primary win, with 3.2 million votes, positions her as the conservative standard-bearer for May 31, but the real contest lies between Iván Cepeda on the left and the question of whether de la Espriella’s populist right candidacy can survive his party’s weak 600,000-vote showing.
Brazil’s Ibovespa rebounded 0.86% to 180,915 on Monday after last week’s brutal 5% decline, but the session masked extreme intraday volatility driven by oil price swings. Petrobras continues to benefit from elevated crude, while the broader index faces headwinds from rising global risk aversion. The Copom meets March 17–18 with the expected 50bp cut to 14.50% now seriously complicated by energy-driven inflation pressures. G7 emergency discussions on strategic reserve releases may partially contain the oil shock but cannot resolve the underlying Hormuz closure.
Argentina’s Milei opened Argentina Week in New York on Monday—a three-day investment roadshow co-organized with JP Morgan and Bank of America—before heading to Santiago for Kast’s inauguration. He backed Trump “fully and absolutely” on the Iran conflict and suggested rising oil prices could benefit Argentina through improved terms of trade for Vaca Muerta. The MERVAL edged up 0.25% to 2,632,795, consolidating after weeks of correction from its January all-time high. Six global banks recently recommended liquidation of Argentine sovereign bonds, citing negative net reserves and cepo persistence—a counter-narrative to Milei’s bullish roadshow.
Regional Mood
Oil at $100 changes everything. Latin America’s political calendar—Kast’s inauguration, Colombia’s May 31 presidential race, Peru’s April 12 election, Bolivia’s March 22 subnational vote—now runs on a global energy clock that no regional actor controls. Net importers face fiscal compression and inflation pass-through; net exporters face a windfall that benefits treasuries but not consumers already paying elevated prices. Sheinbaum’s Monday mañanera recalibrated the sovereignty standoff to a workable register—firm rejection without escalation—but the structural tension remains: Washington wants a military framework for cartel engagement that Mexico will never accept. Tomorrow’s inauguration in Santiago is less about ceremony than about the first real-time test of the Doral coalition’s “secure infrastructure” protocols against Beijing’s counter-diplomacy. The presence of both Landau and Xi’s envoy at La Moneda tells the story: Chile is the battleground, and Kast is the man in the middle.
Risk Snapshot
| Country | Key Driver | Risk Level |
|---|---|---|
| Chile | Kast inaugurated March 11; Landau leads U.S. delegation; China sends special envoy; Border Shield activates; cable dispute unresolved | ELEVATED |
| Mexico | Sheinbaum Monday mañanera rejects U.S. military; fentanyl seizures down ~40%; sovereignty line held; CJNG succession crisis persists | ELEVATED |
| Colombia | Historic Pact leads fragmented Congress; Valencia wins right-wing primary; COLCAP +2.31%; May 31 field crystallizing; final count due mid-week | ELEVATED |
| Cuba | Grid at ~1,000 MW vs 3,000+ MW demand; 12–20hr daily blackouts; Ecuador closed embassy; U.S. oil blockade; Trump regime-change rhetoric | CRITICAL |
| Brazil | Ibovespa rebounds +0.86% but extreme oil-driven volatility; Copom Mar 17–18 rate decision complicated; Petrobras outperforms | ELEVATED |
| Argentina | Milei opens Argentina Week in NYC; MERVAL +0.25%; six banks recommend bond exit; Vaca Muerta benefits from oil surge; then to Santiago | ELEVATED |
| Peru | Fujimori leads López Aliaga 10.7%–10% in latest Datum poll; 38% undecided; April 12 first round; 36 candidates; Senate returns after 34 years | ELEVATED |
Chile
Kast inaugurated tomorrow; Landau leads U.S. delegation; Xi sends Housing Minister as special envoy; Border Shield and cable decision imminent
What Happened
- —U.S. delegation confirmed: The State Department announced Monday that Deputy Secretary of State Christopher Landau will lead the U.S. Presidential Delegation to Kast’s inauguration from March 10–12. The delegation includes Ambassador to Chile Brandon Judd, Acting Assistant Secretary Michael Kozak, and Acting Assistant Secretary of War Joseph Humire. Landau will meet with Kast and senior officials to “reset the U.S.-Chile relationship” on security, supply chains, and commercial ties.
- —Beijing’s counter-signal: China’s Foreign Ministry confirmed Monday that President Xi Jinping’s Special Envoy, Housing and Urban-Rural Development Minister Ni Hong, will attend the inauguration. The presence of both Landau and Ni Hong at La Moneda creates an immediate test case for the Doral summit’s anti-China “secure infrastructure” protocols and the unresolved China Mobile submarine cable dispute.
- —International attendance: Heads of state confirmed include Milei (Argentina), Noboa (Ecuador), Paz (Bolivia), Peña (Paraguay), Chaves (Costa Rica), Mulino (Panama), Abinader (Dominican Republic), Asfura (Honduras), Orsi (Uruguay), and King Felipe VI of Spain. Kast’s appearance at the Doral summit on Saturday—three days before his own inauguration—demonstrated his priorities: Washington first, Santiago second.
- —Women’s Day protests: On March 8—International Women’s Day—thousands of Chilean women marched against Kast’s incoming government. Feminist collective LASTESIS co-founder Sibila Sotomayor warned that “everything we believe in is in danger: women, queer people’s rights, migrant rights, Indigenous rights.” Kast enters office as Chile’s most right-aligned president since the end of the Pinochet dictatorship, with two former Pinochet-era lawyers in his cabinet.
Why It Matters
The dual presence of Landau and Ni Hong at tomorrow’s ceremony makes Santiago the live battleground for hemisphere-wide competition between Washington and Beijing. The China Mobile submarine cable project—the 19,873-kilometre Chile China Express cable approved by the outgoing Boric government—remains the proximate flash point. The U.S. imposed visa sanctions on three Chilean officials over the approval; Kast must decide within his first days in office whether to cancel, reroute, or renegotiate the project under the Doral charter’s anti-China infrastructure protocols.
Markets are pricing in optimism. The IPSA rose 1.11% on Monday to 10,429, building on Friday’s flat close and holding well above the 10,000 support level. The broken transition with outgoing President Boric—the first failure of Chile’s post-Pinochet transition process—means Kast enters without the usual institutional continuity. His Border Shield immigration crackdown activates on inauguration day, promising 3,000 personnel for the northern frontier, but his lack of an absolute congressional majority means the legislative agenda—Codelco audit, fuel subsidy reform, copper-sector regulatory changes—depends on coalition-building with the populist People’s Party.
Key Watch
March 11 inauguration and Landau–Kast bilateral meeting. Cable project decision timeline. Beijing’s response to secure-infrastructure protocols. Border Shield deployment and northern frontier execution. People’s Party coalition terms. Whether Milei and Kast formalize the security-migration-economic agenda they previewed at Doral.
RISK: ELEVATED
Mexico
Sheinbaum responds to Doral with firm sovereignty line; military intervention “proudly” rejected; fentanyl seizures down ~40%; arms trafficking pivot
What Happened
- —Monday mañanera: At her regular morning press conference on Monday, March 9, Sheinbaum responded directly to Trump’s Doral summit remarks. She stated: “It’s good that Trump publicly says that when he has proposed that the United States Army enter Mexico, we have said no, because it is the truth, and we proudly continue to say no.” She said Mexico collaborates on intelligence and security but insisted that all operations within Mexican territory are conducted exclusively by Mexican armed forces, the National Guard, and prosecutors’ offices.
- —Fentanyl and arms: Sheinbaum cited data showing fentanyl seizures at the U.S.–Mexico border have fallen approximately 40% since Trump began his second term—a decline she attributed to Mexican enforcement, including the largest fentanyl bust in the country’s history last December. She pivoted to Washington’s responsibility, citing State Department data that approximately 75% of weapons used by Mexican cartels originate in the United States. She urged Trump to halt illegal arms trafficking southward as the most effective American contribution to reducing violence.
- —Sovereignty line: Sheinbaum’s tone was measured but firm—48 hours after Trump imitated her voice at Doral and declared “the cartels govern Mexico.” She rejected the Shield of the Americas military framework while affirming bilateral cooperation on its own terms. Approximately 100,000 women marched peacefully in Mexico City on Sunday; Sheinbaum acknowledged “legitimate demands” and noted Mexico is the only country in the world with constitutionally mandated gender parity across all three branches of government.
Why It Matters
Sheinbaum’s Monday performance was a masterclass in calibrated pushback. Her response came 48 hours after Trump imitated her voice at Doral, yet she chose measured firmness over escalation—drawing an unmovable red line on sovereignty while avoiding language that could provoke retaliation. The shift from Saturday’s mockery to Monday’s dignified press conference demonstrates that Sheinbaum’s strategy of maintaining composure under provocation still functions. The “Trump whisperer” reputation she earned throughout 2025 was tested this week and, for now, survived.
The CJNG succession crisis following El Mencho’s February 22 killing remains the country’s dominant security challenge. Retaliatory violence continues across multiple states. The IPC fell 0.63% to 66,890 on Monday, extending a decline that has taken the index down from 68,769 highs in late February. The 2026 FIFA World Cup—which Mexico co-hosts this summer—adds a security dimension: 100,000 personnel will be deployed for the tournament, and Trump has not ruled out immigration raids at stadiums.
Key Watch
Whether Sheinbaum’s Monday framing holds or Trump escalates further. CJNG factional dynamics and whether the succession crisis produces a new leadership structure or further fragmentation. USMCA renegotiation timeline as the summer review deadline approaches. Oil price pass-through to Mexican consumer inflation. World Cup security preparations.
RISK: ELEVATED
The Oil Shock: Hormuz Volatility Reshapes Regional Calculus
Brent settled near $99 Monday after briefly spiking past $119 intraday; G7 pledges emergency reserves; Trump threatens Iran; oil pulls back to low $90s Tuesday
What Happened
- —$100 barrel breached: Brent crude surged past US$100 on Monday for the first time since Russia’s 2022 invasion of Ukraine, hitting an intraday high of approximately $119.50 before retreating to settle around $99 after Trump’s intervention. WTI crude followed, briefly exceeding $100. The Strait of Hormuz—through which 20% of global oil transits daily—has been effectively closed since late February following U.S.–Israeli strikes on Iran and Iran’s retaliatory attacks on Gulf shipping.
- —Trump’s threats and G7 response: Trump warned Iran on Truth Social that if it blocks oil flows through the strait, the U.S. response will be “twenty times harder.” He told CBS News he was “thinking about taking over” the strait and said the war would end “very soon.” Separately, G7 finance ministers pledged to release strategic petroleum reserves. Oil prices fell sharply on the combined intervention—Brent dropped from $119.50 to the low $90s in late trading.
- —Gulf production collapse: Iraqi production from its three main southern oilfields has fallen 70% to 1.3 million barrels per day. Kuwait announced precautionary production cuts. The UAE is “carefully managing” offshore output. Qatar halted all gas production on March 2 and declared force majeure on gas contracts. Iran’s IRGC claims the strait is “closed” and has attacked multiple tankers, killing at least two crew members.
- —Latin American transmission: For net importers (Chile, most of Central America, Cuba), sustained $90+ oil compresses fiscal space and amplifies inflation. For net exporters (Brazil via Petrobras, Argentina via Vaca Muerta, Ecuador, Colombia), the shock is selectively positive for energy producers but negative for financial markets through EM risk repricing. Rystad Energy warned Brent could reach $135 if the closure persists four months.
Why It Matters
The Hormuz crisis is now the dominant macro variable for every Latin American economy. Brazil’s Copom faces an impossible trade-off at its March 17–18 meeting: the expected 50bp cut to 14.50% may have to be delayed or downscaled if energy-driven inflation erodes the disinflation path. Argentina’s oil-positive/finance-negative duality—Vaca Muerta benefits while EM risk aversion pushes up country risk—encapsulates the regional dilemma. For Cuba, where the U.S. oil blockade has already collapsed the grid, a global oil supply shock makes any alternative fuel sourcing exponentially more expensive.
U.S. gasoline prices have risen 17% since the war began, with analysts warning of $4+ per gallon if the strait remains closed. The political consequences of sustained high energy prices in a U.S. midterm year create pressure on the Trump administration to resolve the conflict rapidly—a timeline that benefits Latin American energy producers in the short term but introduces massive uncertainty about the duration and resolution of the shock.
Key Watch
G7 energy ministers’ Tuesday meeting on strategic reserve release. Whether Trump’s threat to “take over” the strait translates into naval escort operations. Iran’s new Supreme Leader Mojtaba Khamenei’s first policy signals. Tanker traffic resumption timeline. Impact on Brazil’s Copom decision. Argentina Week investor sentiment under the oil shock shadow.
RISK: CRITICAL
Regional Snapshot
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Colombia The COLCAP surged 2.31% to 2,226 on Monday—the strongest single-session gain among tracked indices—as markets repriced the election outcome. The Historic Pact took approximately 25 Senate seats versus the Democratic Center’s 17. Valencia won the right-wing primary with 3.2 million votes, but de la Espriella’s party drew only 600,000—a weak showing that analysts say makes his presidential candidacy “shaky.” Cepeda remains the left’s standard-bearer and has consistently topped presidential polls. Several parties failed to cross the 3% Senate threshold, including Barreras’s Broad Unitary Front and Gutiérrez’s Creemos party. Final vote-by-vote count due mid-week. Primary losers must formally exit by today. |
Cuba The energy crisis deepened further into what the UN has warned could become humanitarian “collapse.” The grid operates at roughly 1,000 MW against demand exceeding 3,000 MW. Daily blackouts of 12–20 hours remain the norm. Eight of Cuba’s 16 thermoelectric plants are offline. The Guiteras plant was repaired and reconnected over the weekend, but the underlying fuel deficit—caused by the U.S. oil blockade following Venezuela’s loss of oil shipments after Maduro’s capture in January—remains unresolved. Ecuador expelled all Cuban diplomats on March 4–6, closing the embassy in Quito after Noboa declared the mission persona non grata. Air France suspended Havana flights due to jet fuel shortages. |
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Argentina Milei opened Argentina Week in New York on Monday—a three-day investment roadshow co-organized with JP Morgan, Bank of America, and Kaszek. He spoke at Yeshiva University and the Algemeiner gala, voiced “full and absolute” support for U.S. and Israeli actions in the Middle East, and will meet JP Morgan CEO Jamie Dimon on Tuesday. He then travels to Santiago for Kast’s inauguration. Inflation for March is expected around 3%. Six global banks recently recommended exiting Argentine sovereign bonds, citing negative net reserves, cepo persistence, and doubts about crop liquidation—a counter-narrative to the roadshow’s optimism. The BCRA has accumulated over US$2.8 billion in reserves in 2026. |
Peru A fresh Datum Internacional poll released Sunday night showed Keiko Fujimori overtaking Rafael López Aliaga for the first time in weeks, polling at 10.7% versus 10.0% among the record 36-candidate field. Over 38% of voters remain undecided or intend not to vote—a vast pool that makes the first round unpredictable. Other candidates around 5% include leftist Alfonso López-Chau, businessman César Acuña, and comedian Carlos Álvarez. Interim President Balcázar, the country’s ninth president in a decade, entered office on February 18 after Congress removed his predecessor. The April 12 ballot will also reinstate the Senate for the first time since 1992—60 seats alongside the presidential race. |
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Ecuador Noboa justified the expulsion of Cuban diplomats on Monday, stating there was “interference in political and violent activities.” He mocked the embassy’s document burning—”a paper barbecue”—and questioned why diplomats would destroy protected papers. The move marks Ecuador’s fourth major diplomatic rupture with left-aligned countries under Noboa. U.S. Special Forces continue joint operations with Ecuadorian commandos under Operation Southern Spear, targeting FTO-designated Los Choneros and Los Lobos. Ecuador is now Washington’s operational prototype for the Shield of the Americas coalition. |
Bolivia Subnational elections on March 22—for governors, mayors, and local authorities—are 12 days away and represent the first electoral test of President Rodrigo Paz’s post-MAS government. The political landscape is deeply fragmented, with more than fifteen parties per municipality. The MAS has effectively disappeared from the contest, fielding no candidates in any departmental capital. Paz’s coalition partner Doria Medina and VP-turned-opponent Lara are backing competing slates. Inflation remains around 23%, dollar shortages persist. The election will gauge whether Paz’s early reforms—fuel subsidy elimination, lithium privatization push—have translated into popular support or backlash. |
Markets at a Glance
| Index | Close | Change | Context |
|---|---|---|---|
| Ibovespa | 180,915.36 | +0.86% | Rebound after worst week since Nov 2022; Petrobras outperforms on oil surge; extreme intraday volatility |
| MERVAL | 2,632,795.13 | +0.25% | Consolidating; Milei opens Argentina Week in NYC; six-bank bond exit call weighs on sentiment |
| IPC (Mexico) | 66,890.27 | −0.63% | Third consecutive decline; cartel tensions, oil shock, and Doral sovereignty fallout |
| COLCAP | 2,225.68 | +2.31% | Strongest session gain; post-election clarity pricing; Historic Pact leads fragmented Congress |
| IPSA (Chile) | 10,428.64 | +1.11% | Pre-inauguration optimism; Kast pro-business signal; above 10,000 support |
| Brent Crude | US$98.96 | +6.76% | Monday settle; spiked to ~$119 intraday; pulling back to low $90s Tuesday on Trump/G7 intervention |
| Selic | 15.00% | — | Copom Mar 17–18; 50bp cut expected but oil shock may alter guidance or delay |
| WTI Crude | US$94.77 | +4.26% | Monday settle; easing to ~$90 Tuesday; U.S. gasoline up 17% since war began |
Market data reflects Monday, March 9, 2026 closing prices. Equity index figures sourced from TradingView Tier 0 charts provided by editor. Oil prices from CNBC and Bloomberg reporting. Supplementary data from Trading Economics and Rio Times daily briefs.
The Week Ahead
| Date | Event | Country |
|---|---|---|
| Mar 10 | Colombia primary losers must formally exit presidential race; final vote count begins | Colombia |
| Mar 10 | G7 energy ministers virtual meeting on strategic petroleum reserve release | Global |
| Mar 10–11 | Argentina Week in NYC — Milei meets JP Morgan CEO Dimon; investor roadshow continues | Argentina |
| Mar 11 | José Antonio Kast inaugurated as president; Border Shield activates; Landau and Xi envoy attend | Chile |
| Mar ~12 | Final vote-by-vote tally for definitive congressional seat allocation | Colombia |
| Mar 14 | Peru candidate registration deadline for April 12 general election | Peru |
| Mar 17–18 | Copom meeting — first potential rate cut of 2026; Selic at 15.00%; oil shock complicates outlook | Brazil |
| Mar 22 | Subnational elections — governors, mayors, local authorities; first test of Paz government | Bolivia |
| Apr 12 | General election — president, Senate (first since 1992), and Chamber of Deputies | Peru |
| May 31 | Presidential election first round | Colombia |
| Ongoing | Strait of Hormuz crisis — oil prices, shipping disruption, global stagflation risk, EM repricing | Global |
| Ongoing | U.S.–Ecuador joint military operations; Shield of the Americas implementation; CJNG succession | Regional |