EMERGING MARKETS-LATAM equities gain on revived risk appetite after Trump softens Greenland stance

By Ragini Mathur and Twesha Dikshit

Jan 22 (Reuters) - Latin American equities extended gains on Thursday as risk appetite revived following U.S. President Donald Trump's decision to rule out taking Greenland by force and abandon tariff threats against European allies.

Trump said he had secured permanent U.S. access to Greenland through a framework deal with NATO, whose head said that allies would need to bolster their Arctic security commitments to counter threats from Russia and China.

Trump's softer stance triggered a rally across global markets, with some Latin American indexes reaching record levels on Wednesday.

MSCI's Latin American stocks gauge .MILA00000PUS climbed 1% to a more than six-year high on Thursday, while the corresponding currency index .MILA00000CUS remained relatively stable near record high levels.

"The recent peak of risk aversion barely generated a reaction from Latam FX standpoint, instigating only a mild initial sell-off that was swiftly wiped out, as all major FX currencies in the region now trade stronger than last week’s closing," analysts at Citi said in a note.

The resource-rich region has started 2026 on a strong footing, buoyed in part by a substantial rally in precious metals as investors sought safe havens amid Trump's actions in Venezuela and ambitions in the Arctic.

However, gold prices pulled back as tensions eased.

REGIONAL MARKETS WERE MIXED

Mexico's benchmark stock index .MXX moved 0.2% higher and its currency MXN= traded 0.1% lower against the U.S. dollar. The country's annual inflation rate rose to 3.77% in the first half of January, resuming an upward trend briefly interrupted at year-end 2025.

Argentine equities .MERV traded 0.7% higher and the peso ARS= moved 0.2% higher ahead of retail sales data expected to offer fresh insights into consumer sentiment in the country.

Brazilian stocks .BVSP added 1.5% while the currency BRL= moves were muted.

In trade developments, an EU diplomat told Reuters that the bloc's free trade agreement with South American countries could be provisionally applied as soon as March, despite a pending challenge at the EU's top court.

Elsewhere, a final estimate confirmed the U.S. economy expanded 4.4% in the third quarter of 2025, slightly above initial projections.

Meanwhile, Ukrainian bonds rallied, with those maturing in 2035 XS2895056369=TE and 2036 XS2895056526=TE gaining nearly 3.2 cents against the dollar, according to Tradeweb data.

President Volodymyr Zelenskiy said he discussed peace talks and air defence with Trump during a 'productive' meeting. Trump described the talks as "good" and said his message to Russian leader Vladimir Putin was that the war in Ukraine had to end.