For the first time in weeks, the trend in the short-term bond indicates expectations of a rate cut in the months to come.
This month the Bank of Israel raised interest rates three times, by 1%, 1.5% and 2%, bringing the nominal rate on its sources to 9.1%. Judging by the market's behavior today, investors are not expecting any further rate hikes in the foreseeable future.
Investment houses are already discussing when the central bank might lower the rates again. The chief economist of Nessuah Zannex, Shlomo Maoz, expects a 0.5% rate cut for September.
The harbinger of the change in trend came from the dollar, which has lost 20 agorot against the shekel since the latest rate hike. The shekel's recovery against foreign currencies boosted blue chips and led yields on the bond market to drop again.
Today, Sunday noon,
short-term certificates maturing in September are down 0.8%, with yields sinking to 8.7%. The market evidently expects a rate cut in September but isn't looking further than that.
The volume of transactions in
is NIS 70 million.
Longer dated securities are also climbing as their yields drop. Nine-year fixed-interest Shahars are seeing yields fall to 10%, while their price shoots up 3.2%.
Variable-interest Gilon bonds are rising 0.8%, while dollar-linked Gilboa bonds are sagging together with the dollar's exchange rate.
Market players say that most of the action this morning is in shekel vehicles, with hardly any deals in bonds linked to the consumer price index. Dollar-linked vehicles are down an average of 1.5% this morning, market players say.