The long end of the curve appears well anchored on BoI purchases

ISRAEL - Report 25 May 2020 by Jonathan Katz

The economy continues to return gradually to full activity.
- Credit card purchases increased by 80% from April 19th to May 18th.
- Purchases in mid-May are still down 12% YTD.
- Output of electricity in the first two weeks of May is down 9.9% y/y compare to -12.8% in April.

April's data remains dismal - The number of unemployed and "temporary absent from work" due to Covid-19 reached 1.4ml up from 1.03ml in March. The official unemployment rates remains low at 3.3%, but counting the additional "temporarily absent" (forced non-pay leave), unemployment reached 34.7% in April up from 21% in March. We expect unemployment will reach 8%-9% by end-year.

Q120 GDP data reflect a contraction of -7.1% saar - PC down 20.3%, exports down 5.9% and investments down 17.3%. Imports declined by a sharp 27.5% (supporting GDP).
- On the upside, industrial exports increased by 13.9% and "other services" (mostly high tech) exports increased by 18.4%!

Job vacancies in April declined to 27k, down from 90k in February.

The PMI improved modestly in April to 39.3 points, still reflecting contraction.

Now read on...

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