Shekel appreciation continues

ISRAEL - In Brief 26 Sep 2021 by Jonathan Katz

---

Brief Weekly Macro Review26/9/21With Israel still enjoying a holiday season, economic data has been sparse. Here are some highlights: The shekel continues to appreciate, by 0.55% in the past week (against the basket) and by 0.9% so far this month (following 1% in August). In July, foreign investors increased their share of Israel government bonds to 11% (from 10.5% in June and 7.3% in Dec 20), and 33.1% in Makam notes (1-year BoI notes) from 32.3% last month and 18.7% in Dec 20. Macro fundamentals remain shekel positive on the back of a robust hi-tech sector and FDI. So far, some market volatility last week did not reverse this trend.Consumer demand remains strong. Initial data for the first two weeks of September (not seasonally adjusted) reveal that credit card purchases increased by 2.7% m/m.Food consumption went up, while leisure and hospitality declined (mostly seasonally). We have underlined the fact that less travel abroad is growth supportive. Although some restrictions on traveling have been cancelled, travel abroad remains way below seasonal norms. Consumer confidence did decline in the second half of August to -17 points from -14 in the first half, most likely due to high infection rates and some restrictions on domestic activity (the mandatory green pass, etc.).Job vacancies remain elevated in August, reaching 137.3k following 135.9k in July (sa). This compares with a pre-Covid level of slightly below 100k. On a positive note: demand for workers in food services declined by 8%. We note that most Covid government supports were cancelled on July 1st (for those on furlough up to age 45), but many (parents especially) are postponing returning to work until the ...