We don’t know his plans, but the Bank of Israel’s much lauded head, Stanley Fischer, may soon join the increasingly globally
poachable mobile labour market for CB heads. He’s a free man from the end of June… and we hear there’s an opening in Canada. Read more
Israel’s central bank had just cut interest rates at pixel time on Monday, easing by 25bps to a 2.25 per cent policy rate.
Why’s this one so important, we hear you ask. Read more
After holding our heads in our hands and getting over a wave of nausea, FT Alphaville looked up and realised that yes, we really were looking at a trade idea involving credit default swaps that takes a view on the likelihood of an Israeli missile strike on Iran. It’s a ugly world. Thanks for the reminder, Nomura (emphasis ours):
The probability of a unilateral strike from Israel on Iran over the coming months has now fallen, while global concerns are shifting back towards Europe. We think this presents an opportunity to buy Israel credit against low-beta Europe. Read more
And now for something completely different..
Middle Eastern credit spreads could soon blow up amid an outbreak of political strife with potentially global consequences. Read more
If you were expecting widespread easing of policy rates across the emerging world, think again.
Since the end of August three EM central banks have cut rates — Brazil, Israel and Indonesia – but don’t go expecting much more monetary easing, Citi has cautioned in a recent report. Read more
Shares in some of Israel’s most powerful business groups have fallen dramatically in recent days, amid mounting investor concern that the recent wave of social protests gripping the country will force the government to take action against the country’s “oligarchs”, the FT reports. Business leaders such as Nochi Dankner and Yitzhak Tshuva have already seen the value of their main holdings fall by 20-40 per cent, with losses far outpacing the broader decline in the Israeli stock market. Analysts said the losses reflected the recent surge in market turbulence around the world, and related worries over the large debts amassed by prominent Israeli holding groups such as IDB. However, market watchers argue that at least some of the damage has been caused by the recent eruption of protests across the country.
Stanley Fischer, the Israeli central bank governor, made a surprise entry to the race to become the next managing director of the International Monetary Fund, as the two existing candidates fight to boost their credibility with emerging market countries, the FT says. Fischer, previously a second-in-command at the IMF, made public his decision on Saturday shortly after nominations closed, to the surprise of several emerging markets. The Jerusalem Post says Fischer’s candidacy is currently seen as a long-shot behind French Finance Minister Christine Lagarde. Meanwhile, Fischer noted in an interview with the WSJ that “without having that [economic] training, it’s very hard to know who’s right and who’s wrong” at the IMF. Read more
Two Iranian navy ships entered the eastern Mediterranean after passing through the Suez Canal on Tuesday, the first such voyage since 1979 and one that has raised sharp concerns in Israel, reports the FT. Egyptian officials told Reuters news agency that the two vessels – one frigate and one supply ship – had entered the Suez Canal at 5.45am. They entered the Mediterranean Sea in the late afternoon, according to several reports citing Egyptian authorities. Read more
The US is reverting to the idea of indirect talks between Israelis and Palestinians, just three months after Barack Obama hailed the beginning of direct negotiations with a ceremony at the White House, the FT reports. The move follows the US’s acknowledgement of defeat in its quest to convince Israel to extend a moratorium on building settlements on the West Bank. With its Middle-East policy in disarray and amid widespread criticism, the administration has now dropped its long-held insistence for a freeze to be in place before peace talks can proceed. Meanwhile Bloomberg reports that the dispatch of US envoy George Mitchell signals the revival of ‘shuttle diplomacy.’ Read more
And to think the market shorthand has always been Japan = deflation.
Trust Société Générale strategist Dylan Grice to think of the Japanese future a little, um, differently. From Friday’s Popular Delusions note: Read more
Hedge fund management ought to be big business in Israel, argues Israeli lawyer Menachem Feder at Haaretz.com. But Israeli law makes forming hedge funds with local management so difficult that only a few such funds exist, he says.
Feder’s argument – that the government should instead let hedge funds flourish – comes at a time when politicians in Europe and North America and are calling for greater regulation of the sector, and financial pundits are daily predicting a global hedge fund meltdown.
Feder, a partner at law firm Caspi & Co, which advises on the establishment and management of hedge funds, says the restrictive approach taken by the Israeli government is “blunt and self-defeating,” and undermines the country’s intellectual capital. Read more