The financial market is applauding the Bank of Israel's 2% rate hike for July, announced yesterday. Bonds are rising strong, correcting losses accrued over days in the doldrums.
The corrections actually started yesterday, on expectations of a serious rate hike.
Long-term unindexed Shahar bonds are rising by 2%, reflecting returns of 10.9%.
Shahar series 2671 seven-year bonds rose 5% this morning, but lose some momentum as the session approached noon, and are now up 2.8%, reflecting returns of 10.7%. Turnover is low, however, at NIS 600,000.
Gilon bond prices are also rising briskly: Eight-year bonds are up 2% reflecting a return of 11.9%, and nine-year bonds are gaining 1.6%, reflecting a return of 12%.
CPI-indexed Galil bonds are rising by half a point on average. They have also been taking a pummeling as the public dumped holdings in mutual funds.
Gilboa dollar-linked bonds are sagging as the dollar sinks against the shekel this morning. The dollar is down 0.65% from its representative rate of Monday to NIS 4.914 as of writing.
Today June options on the shekel-dollar rate expire. Prico, a company that specializes in forex trading, says the expiry will have a record scope of over $1.5 billion in underlying assets (of options in the money). They believe that the end-of month supply, also the quarter-end in this case, could bolster the shekel even further.
Prico estimates that the shekel's appreciation will stop at NIS 4.88 to NIS 4.92 to the dollar.