Foreign holdings of Colombian TES stood at 26.6% in November, a similar percentage than in the previous month. In nominal terms, there were marginal increases in nominal TES and UVR for a total of COP 0.59tn. Commercial banks and BanRep were the main buyers, and financial corporations and pension funds were the main sellers, while international investor activity was marginal. In line with other Andean bond markets, the TES bond curve performed well, yields compressed on average c.80bp in a parallel move. Economic activity is still healthy, but inflation has surprised to the upside. Against this backdrop, the central bank is poised to hike the policy rate at the next meeting on 16 December. So far this month, the front end of the curve has underperformed as investors anticipate the central bank’s next rate decision. While investor sentiment towards Colombian assets seems to be improving slightly, concerns remain about fiscal and trade positions.