Weekly report, August 3, 2026: Markets remain resilient despite geopolitical uncertainty
The weekend was dominated by reports that the United States was preparing strikes against Iran's energy infrastructure, including power plants. The prospect of attacks on critical energy facilities pushed oil prices higher and increased concerns that Israel could be drawn into the war. However, President Trump ultimately decided to postpone the operation to allow another round of negotiations with Iran.
Israeli financial markets reacted calmly to reports of a possible U.S. strike. On Thursday, the TA-35 Index rose by 1.3%, following a 1.2% gain on Wednesday, although it still ended the week down 2.4%. The shekel remained broadly stable at around ILS 3.05 per U.S. dollar, while government bond yields edged modestly lower.
Few major activity indicators were released over the past week. The main release was consumer credit-card purchases in June, which declined by 1.6% m/m (seasonally adjusted). However, we attach greater importance to the broader trend than to the monthly volatility. Credit card spending increased by 6.0% over the second quarter and remained around 3% above its average level prior to Operation Roaring Lion, suggesting that private consumption recovered quickly following the temporary disruption.
This release adds to the encouraging picture from the previous week. Recent data on VAT-based revenue indices, industrial production, high-tech activity and foreign trade all pointed to a broad-based recovery in economic activity during the second quarter. In particular, industrial production in April-May increased by 12% relative to the first quarter, led by a 14% increase in high-tech manufacturing, while business revenue remained above its first-quarter average. Merchandise exports also strengthened, reflecting continued resilience in export-oriented industries. Looking ahead, the first estimate of the second-quarter GDP, due to be released on August 15, is expected to confirm that the Israeli economy rebounded strongly after the temporary slowdown in the first quarter.
Important macro data this week:
Average wage for May and flash estimate for June: On Tuesday (August 4), the CBS will publish the average wage for June 2026, one of the Bank of Israel's key indicators for inflationary pressures. In May, average nominal wages increased by 6.7% y/y, after 4% in April and 8.8% in March, while the underlying trend remained close to 6%, suggesting massive wage pressures.
May services exports: On Tuesday (August 4), the CBS will publish data on services exports in May, with particular attention to high-tech services. This is one of the most important indicators for Israel's balance of payments and the foreign exchange market, as high-tech services account for 40% of Israel's exports. In April, services exports reached USD 9.1bn, including USD 5.9bn in high-tech services, which were 15% higher than a year earlier.
July tourism statistics: On Tuesday (August 4), the CBS will also release July tourism statistics, including arrivals of foreign visitors and Israelis traveling abroad. In June, inbound tourism continued to recover only gradually, with tourist arrivals increasing to 66.9 thousand from 51 thousand in May. In contrast, outbound travel by Israelis reached 634 thousand departures, 15% above the level recorded two years earlier.
July business tendency survey: On Wednesday (August 5), the CBS will publish the Business Tendency Survey for July, providing one of the earliest readings on business activity and sentiment. The survey covers manufacturing, services, retail and construction. In June, the survey pointed to continued expansion in business activity with the net balance up slightly, to 16.9 points from 15.35 in May, but still below January’s print of 20.5.
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