Shekel Advances On Weaker USD, Judicial Overhaul Compromise Talk

USD/ILS has lost some altitude, which has been facilitated by broader USD losses, but could be linked to domestic factors as well. Reports were doing the rounds in local media that PM Netanyahu was pushing for the "unilateral softening" of his judicial reforms, while one of the opposition leaders Benny Gantz said he would be open to a compromise if it "preserved democracy". Haaretz later reported that Netanyahu and Gantz are holding indirect talks mediated by President Isaac Herzog's staff to explore the option of a compromise deal. The shekel showed a muted initial reaction to these reports but has subsequently garnered some strength and is the third-best EMEA performer.

• Spot USD/ILS operates at 3.8162, down 344 pips on the session. A dip through Sep 4 low of 3.7647 would encourage bears, opening up Aug 24 low of 3.7520. On the flip side, bulls look for a rally above Sep 8 cycle high of 3.8612.
• Consumer confidence in Israel deteriorated to 72 in August from 80 prior. Later this week, Israel will report trade balance (Wednesday), current account balance (Thursday) and CPI (Friday).