Colombia Election Essentials

Colombia's upcoming presidential election sees markets pricing in a right-leaning victory, with USDCOP currently showing a 4.5% risk discount. A closer-than-expected race from left-wing candidate Iván Cepeda poses significant downside risk to Colombian assets.

Key Takeaways

• 1.Markets have already priced in a combined right-leaning victory; any narrowing of this expected lead for the left could trigger a sell-off.
• 2.The USDCOP is currently 4.5% weaker than its fundamental model suggests, indicating limited but present election risk pricing.
• 3.Undecided voters represent a high 21-25% of the electorate, potentially favoring Paloma Valencia over candidates with higher rejection rates.

Table of Contents

• When will the first and second rounds of the presidential election take place?
• At what time on May 31 will authorities release the first-round results?
• What do the polls suggest are the most likely outcomes particularly with respect to the first round?
• Who is most likely to reach the second round from the right: de la Espriella or Valencia?
• What is the percentage of undecided voters?
• What are the main economic proposals of each candidate?
• How is the market likely to react under different scenarios?

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