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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Illustration of Bitcoin price falling below 82000 due to rising treasury yields
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Bitcoin falls below $82,000 as treasury yields surge

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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.

One-year Treasury bills (TES) rates hit a new record in auction number 13 by the Public Credit Directorate, reaching 13.693%. This surpasses the previous high and marks a 2.2 percentage point increase so far this year. The upward trend raises concerns over the Colombian Government's borrowing costs.

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Colombia's Public Credit Directorate awarded one-year TES bonds at a cut-off rate of 13.494% in the March 24 auction, setting a new historical high. With 5.29% inflation, this yields a real rate near 8.2%. The outcome signals heightened fiscal risk perception among investors.

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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India's 10-year benchmark bond yield rose 7 basis points to 6.94% on Friday, signaling concerns over inflation and potential monetary tightening. High Brent crude prices above $100 per barrel, driven by the West Asia conflict, have intensified fears, compounded by the rupee falling below 94 to the dollar.

In its May 1, 2026 board meeting, Banco de la República unanimously kept the benchmark interest rate at 11.25%, surprising analysts expecting a hike to combat accelerating inflation. Finance Minister Germán Ávila participated fully, citing constructive dialogue, while board members justified the decision to maintain stability amid political pressures.

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Spain's 12-month Euríbor, benchmark for most variable-rate mortgages, closed April at 2.747%, its highest since September 2024. This marks a 60.4 basis point rise from a year ago, raising average annual mortgage payments by about 600 euros. The increase pressures both variable and fixed-rate mortgages.

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