EMERGING MARKETS-Latin American assets rise as Trump eases Greenland rhetoric

By Twesha Dikshit, Ragini Mathur and Johann M Cherian

Jan 21 (Reuters) - Latin American assets advanced on Wednesday, with most regional equity benchmarks at record highs, as investors were relieved that U.S. President Donald Trump toned down his rhetoric over acquiring Greenland.

Trump said no nation except the U.S. could secure Greenland, at the World Economic Forum at Davos in Switzerland, but took back his earlier threats to use military force.

Later in the day, he also backed down from his threats to slap tariffs on some European nations to achieve his goals.

“Frankly, the specifics of the ‘deal framework’ don’t really matter, just that there shan’t be an escalation, and that tariffs won’t happen, is enough to soothe any and all worries that investors had had,” said Michael Brown, a senior research strategist at Pepperstone.

The U.S.' Greenland strategy has proved contentious, with NATO leaders warning it could cause a rift in the alliance and spark a trade war. The uncertainty also hindered planned sovereign bond issuance out of Georgia and Benin.

MSCI's Latin American stocks gauge .MILA00000PUS rose 2.7%, posting its biggest one-day gain since August. A corresponding gauge for FX .MILA00000CUS added 0.7% to touch a record high.

J.P. Morgan data showed that the flow of money into emerging markets assets for 2026 was already half of the total recorded flows in 2025, pointing to a strong start after EM outperformed Wall Street last year.

STOCKS SHINE, FX BROADLY HIGHER

Brazil's benchmark index .BVSP rose 2.9%, surpassing 170,000 points for the first time. A poll showed President Luiz Inácio Lula da Silva in the lead ahead of October's election, while Senator Flavio Bolsonaro gained support.

The country's central bank ordered the liquidation of Will Financeira SA, a unit of troubled lender Banco Master, a day after Mastercard MA.N said it had suspended Will Bank cards due to non-compliance under a payments agreement.

Separate reports on the Mexican economy in December and retail sales in November reflected resilience. The benchmark stock index .MXX added 0.3% and touched an all-time high.

Higher commodity prices, including those of copper, crude oil and precious metals, also buoyed risk-taking.

Peru's shares .MXNUAMPESCPGPE were marginally higher. Colombia's index .COLCAP gained 1.4%, while those in Chile .SPIPSA and Argentina .MERV also moved higher.

Currencies were broadly higher. The Mexican peso MXN= strengthened 0.6% against the greenback. Chile's peso CLP= and Brazil's real rose over 1% each.

Venezuela's private sector said economic measures taken by the interim government, including freshly injected foreign currency, could help stabilize the exchange market and prices.

In other news, U.S. special envoy Steve Witkoff and Trump's son-in-law Jared Kushner will meet Russian President Vladimir Putin on Thursday, and Ukrainian officials later, in an attempt to negotiate a peace deal.

Some Ukrainian international bonds XS2895057334=TE, XS2895055981=TE rose over 1.5 cents on the dollar each, according to TradeWeb data.