ISRAEL
Analyst
Jonathan Katz
Former Chief Economist, Finance Ministry Budget DepartmentRecent Country Insights
Inflation moderation reduces the likelihood of a rate hike
ISRAEL · Report · 21 Oct 2024
1. September’s low CPI print reduces the likelihood of a rate hike in the coming months. 2. The shekel appreciated sharply on Friday following the Sinwar assassination, but a ceasefire could be elusive. 3. Trade data point to both export and import expansion in Q324, but growth in Q424 wil...
Low inflation print reduces the likelihood of tightening in coming months
ISRAEL · In Brief · 20 Oct 2024
Geopolitics: The death of Sinwar, the Hamas leader, was greeted with some cautious optimism regarding a possible cease-fire. Israel continues its ground offensive in Northern Gaza and into Southern Lebanon. Missiles and drones from Hezbollah continue to be fired into Israel at a high intensity ca...
Downward inflation surprise in September reduces chances of tightening in the near future
ISRAEL · In Brief · 15 Oct 2024
September’s inflation print (-0.2% m/m 3.5% y/y moderating from 3.6%) came in below market expectations of no change (0,0%, ours as well). Core inflation moderated as well to 3.0% y/y from 3.1%. Housing rental price (OER) accelerated slightly to 2.8% y/y from 2.6%. The big surprise came from airf...
The Deputy Governor hints at possible tightening
ISRAEL · Report · 15 Oct 2024
1. Rates remained on hold last week, with the Deputy Governor sounding rather hawkish compared to the Governor. 2. The fiscal deficit pushed higher in September but is expected to reach 7.2% GDP this year. 3. Economic growth accelerated in Q324 (exports especially), with expectations for so...
The Deputy Governor sounds more hawkish than the Governor
ISRAEL · In Brief · 13 Oct 2024
Geopolitics: Israel continues to push on with its ground operation into Lebanon, while missiles into Israel’s North (including the Haifa area) continue at a high intensity. Israel continues to attack parts or Northern Gaza as well. The Israeli retaliation against Iran appears imminent, with the m...
Rates on hold for now, but possible tightening in the coming year
ISRAEL · In Brief · 10 Oct 2024
Rates on hold despite an increase in the inflation environment There were no real surprises in the interest rate decision. The Bank of Israel noted that there was an acceleration in inflation broadly, including tradable components (mainly goods) and non-tradable components (services), mainly due ...
Will the BoI sell FX in the market?
ISRAEL · Report · 07 Oct 2024
1. We have seen an elevated geopolitical risk vis-à-vis Iran in recent days. 2. This is likely to support a weaker shekel (depending on the level of escalation), in which case we think the BoI is likely to sell FX in the market. 3. Recent private consumption indicators for August point to d...
Further significant shekel depreciation could result in BoI intervention
ISRAEL · In Brief · 06 Oct 2024
Geopolitics: Israel has escalated intensely its attacks on Hezbollah attacking Beirut as well as commencing a limited ground operation. Hezbollah continues to fire missiles into the northern part of Israel. Markets are awaiting Israel’s response to Iran’s ballistic missile attack last week with g...
Bond yields push higher on downgrade and escalation
ISRAEL · Report · 30 Sep 2024
1. Bonds sold off modestly yesterday on Moody’s two-notch downgrade and the escalation in the North. 2. Recent economic indicators point to growth acceleration in Q3, at least until the escalation in September. 3. With inflation expected to remain elevated for most of 2025, monetary easing ...