Shekel Rally Pauses, Israel's Inflation Misses Expectations

The shekel fluctuates near neutral levels and USD/ILS last sits at 3.6095, a touch lower on the day, with the recent sell-off losing momentum. Bears look for further weakness, which would bring the 200-DMA (3.5641) into play. Bulls keep an eye on Jun 30 high of 3.7308, followed by Jun 2 high of 3.7551.

• Israel's CPI inflation slowed to +4.2% Y/Y in June from +4.6% prior, missing the +4.4% consensus forecast and reaching a level last seen in May 2022. Prices were unchanged M/M, even as consensus was looking for a 0.2% increase. Cooler than expected CPI readings support the Bank of Israel's recent pivot towards a pause in its rate-hike cycle.
• Knesset Constitutional Committee head Simcha Rothman said that he will be advancing the so-called "reasonableness" bill through parliament next week, with Army Radio reporting that he shortened the period for debate to prevent attempts to soften the legislation. Separately, according to Kan, Prime Minister Netanyahu told President Isaac Herzog that he is consulting on another version of the bill but is not interested in resuming negotiations with the opposition.