Short-term TES bond yields reach two-decade highs

Yields on one-year TES bonds have climbed to historic levels in auctions held by Colombia's Finance Ministry so far in 2026.

In the April 28 auction the yield on one-year titles reached 13.720 percent, a new high not seen in at least two decades.

The year started with a yield of 11.490 percent on January 6 and rose to 13.480 percent in the May 12 auction, an increase of 1.99 percentage points.

Analyst Diego Montañez from Universidad Eafit said rates are high across all terms and the government is borrowing expensively in both the short and long term.

Since late March the TES curve has shown flattening, with one-year papers demanding higher yields than longer maturities.

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Traders in a Brazilian financial market monitoring screens with rising Selic rate graphs and hike predictions.
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Market raises bets on Selic hike in August

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Future interest rates rose on Tuesday, June 9, 2026, increasing the chances of a Selic hike in August. The benchmark rate stands at 14.5% per year. The market attributes the shift to inflation expectations and external news.

In its latest auction, Colombia's Ministry of Hacienda placed 900 billion pesos in short-term Treasury titles (TCO) maturing April 20, 2027, at a cutoff rate of 13.450%—slightly lower than the prior auction's 13.65%. Bids totaled 1.6 trillion pesos, or 1.7 times the amount offered, signaling robust demand amid efforts to develop the domestic capital market.

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The Ministry of Finance awarded $900 billion in a short-term bond auction at a cut-off rate of 12.99%.

Global financial markets reacted on Monday to renewed surges in oil prices and geopolitical tensions in the Middle East, continuing the economic ripple effects first seen after the Iran conflict and Hormuz blockade earlier this year.

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Bitcoin traded at $79,083 on May 15, down more than 3 percent after failing to hold above $82,000 resistance. Rising US Treasury yields are drawing institutional capital away from the cryptocurrency and into government debt.

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