Shekel Extends Losses After Netanyahu Refuses To Budge On Judicial Overhaul

USD/ILS extends gains after PM Netanyahu fended off an internal pushback against his judicial overhaul and vowed last night that the core elements of the reform will be approved by parliament as soon as next week.

• The rate tumbled as low as to ILS3.5351 yesterday in reaction to reports noting that Defence Minister Gallant could publicly urge the Premier to halt the judicial overhaul, which did not materialise after Netanyahu summoned him for a meeting.
• Netanyahu's defiant statement inspired a strong rebound in USD/ILS, which found support in its 50-DMA on the earlier downswing. The pair bounced off that moving average and returned above Mar 9 low of ILS3.5669.
• USD/ILS has crept higher still as traders returned to desks today, with bulls looking for a renewed attack on Mar 20 cycle high of ILS3.7130 to confirm that they are having the upper hand. Bears need a sustained move through Mar 9 low and towards the 50-DMA (ILS3.5413) to prove that they are gaining some momentum.
• The rate's one-week implied volatility has staged a decent comeback after a notable dip seen Thursday, albeit recent cyclical highs remain intact. Moves have been more limited further out the curve, with one-month and one-year tenors operating near unchanged levels.