Bethel Finance news:
Israel’s 10-year government bond climbed for a fourth day, pushing yields to the lowest level in a month, as consumer prices rose less than expected, spurring bets the pace of interest rate increases may slow.
Annual inflation accelerated to 4.3 percent in March from 4.2 percent the previous month, below the 4.4 percent expected by economists in a Bloomberg News survey, the Jerusalem-based Central Bureau of Statistics said April 15. In the U.S., the consumer-price index, excluding volatile food and energy charges, rose 0.1 percent, less than the 0.2 percent increase projected by economists surveyed by Bloomberg.
“We expect the governor to leave interest rates unchanged at the end of the month as the U.S. may wait longer to start raising interest rates,” Yaniv Hevron, head of macro-strategy at Ramat Gan, Israel-based Excellence Nessuah Investment House Ltd., said by telephone. “A widening interest rate differential with the U.S. is more of a concern to the central bank than inflation.”
The yield on the benchmark Mimshal Shiklit note due January 2020 slid 3 basis points to 5.23 percent at 12:16 p.m. in Tel Aviv, the lowest since March 17. The shekel was little changed at 3.4181 per dollar on April 15.
Bank of Israel Governor Stanley Fischer raised the benchmark lending rate by a half percentage point at the end of March, the biggest increase in five years, as inflation accelerated past the government’s 3 percent ceiling for a second month. The rate stands at 3 percent, the highest since November 2008. Fischer will leave the rate unchanged on April 24, according to 10 of 16 economists surveyed by Bloomberg at the end of March and the beginning of April. Three predict a quarter-point increase and the other three a half-point boost.
Inflation expectations, as derived from the bond market declined with the spread between inflation-linked bonds due October 2014 and fixed-rate notes of similar maturity narrowing 17 basis points to 315.5 points today from 332.8 points on April 14. That implies expected inflation of about 3.2 percent, down from 3.3 percent.
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