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2025-10-20 21:45:47
Colombian Bond Rally Suspends as Geopolitical Risks Trigger Capital Flight: (1) Colombian dollar-denominated bonds fell across the board on Monday, with long-term bonds becoming the worst-performing emerging market asset class. (2) Trump's accusation of the Colombian president as an "illegal drug kingpin" sparked market concerns about economic retaliation against the country. (3) Bonds maturing in 2061 fell nearly 1 cent to around 61 cents per dollar, reversing the bond market's upward trend. (4) The Colombian peso fell 1.4% in Bogota trading, with the exchange rate and bond markets falling in tandem. (5) Bonds had been strengthening over the past three months thanks to reforms to the government's borrowing strategy and measures to reduce the debt burden. (6) Markets had been betting on a pro-market government shift after next year's election, and this expectation provided support for the bond market. (7) Trump's announcement that he would suspend aid to Colombia and planned to announce new tariffs the following day exacerbated market panic.
