Low inflation, strong shekel and mixed growth support rate cut today (Monday)

ISRAEL - In Brief 24 Nov 2019 by Jonathan Katz
Rate cut expected today (Monday) We think that weak inflation, a strong shekel and soft underlying growth support a 0.15% rate cut today. Headline inflation is running at 0.4% y/y, and core: 0.5% in October, declining from 0.7% last month and 0.9% two months ago. The shekel has appreciated by 2.3% (against the basket) this month, and remained stable since the last rate decision.Despite strong headline GDP print in Q319 (4.1%), excluding inventories growth contracted by 2.1%.Exports (-8.4%), fixed capital investments (-6.1%), and non-durable PC (1.1%) all disappointed.On the other hand, the global economy appears to have stabilized, with downside risks less elevated.It is not clear how the current political uncertainty will impact rates. So far, the shekel and bond markets appear unphased. Moody's reaffirmed Israel's A1 credit rating with a positive outlook. We cannot rule out a more aggressive loosening move than just a 0.15% cut, including rates down to zero and/or some form of QE through non-sterilized FX purchases.

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2024 GlobalSource Partners. All rights reserved. This is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this or its contents.