Colombian bond rally faces risk of faltering amid escalating tensions with the US

Jin10 data on October 20th: Colombian dollar bonds fell across the board on Monday, with recent gains being thwarted. Previously, US President Trump accused Colombian President Gustavo Petro of being an "illegal drug lord," raising market concerns about potential economic retaliation against the country. According to indicative pricing data compiled by agencies, the country's long-term dollar bonds have become the worst performers in emerging markets, with bonds maturing in 2061 dropping nearly 1 cent to around 61 cents per dollar face value. In Bogotá trading, the Colombian peso fell by 1.4%. Over the past three months, the bonds had been strengthening due to the government's borrowing strategy reforms aimed at reducing debt burdens. At the same time, the market is betting that the country will shift towards a more market-friendly government after next year's elections, providing support for the bond market. Last Sunday, Trump posted on social media that the US would suspend aid to Colombia and stated that he would announce tariffs on Colombia tomorrow, further escalating market concerns.