Israeli assets traded in narrow, mixed ranges on Monday as traders looked for more evidence on whether Prime Minister Benjamin Netanyahu’s latest pronouncements on his plan to overhaul the judiciary would be enough to halt unrest in the country.
(Bloomberg) — Israeli assets traded in narrow, mixed ranges on Monday as traders looked for more evidence on whether Prime Minister Benjamin Netanyahu’s latest pronouncements on his plan to overhaul the judiciary would be enough to halt unrest in the country.
Israel’s hard-currency notes due 2026 rose 3 cents to 93.9 cents on the dollar while the bonds maturing in 2028 fell 3 cents to 92.9. The yield on notes due in 2043 dropped for the first day in five, retreating to 5.44%. The shekel moved between losses and gains against the dollar, while the benchmark stock index rose for a second day, heading for its highest close in two weeks.
“Even a partial judicial overhaul may be too much for the opposition to accept,” said Win Thin, global head of currency strategy at Brown Brothers Harriman & Co. in New York. “I think it really depends on whether this compromise is enough to end the protests. My sense is no.”
Netanyahu Seeks to Change How Judges Are Named, Then Stop Revamp
Netanyahu said he would abandon pursuing the entirety of his controversial overhaul and focus on how judges were appointed.
“That’s basically what’s left — because other things I think we should not legislate,” the prime minister said in an interview with Bloomberg Television in Jerusalem on Sunday. Asked about his next move, he said “it would probably be about the composition of the committee that elects judges.”
Brendan McKenna, a emerging-markets strategist at Wells Fargo Securities, said the latest comments were the most explicit yet about abandoning select proposals, leaving local markets somewhat optimistic that political risk in Israel could ease.
“If Netanyahu does indeed halt the remaining items on the judicial reform agenda, easing political risk could be the catalyst for a shekel rebound,” McKenna said, adding it was “highly contingent on Netanyahu following up on this commentary.”
Many are not optimistic.
“What Netanyahu portrays as a compromise on judicial reform is not regarded as such by protesters who still fear permanent damage to the country’s democracy and the parliamentary opposition view as the most likely topic on which they can regain some relevance. All of that still makes for an unhelpful backdrop for Israeli asset prices,” according to Hasnain Malik, a strategist at Tellimer in Dubai.
(Updates with analyst comment in eigth paragraph.)
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