Shekel Stabilises After Sharp Rally Last Week

The shekel has paused its dynamic rally from last week, when it topped the EMEA scoreboard. Those sharp gains for the ILS may have stemmed from press reports suggesting that Prime Minister Benjamin Netanyahu could try and deliver a watered down version of his controversial judicial overhaul, with negotiations brokered by President Isaac Herzog expected to continue.

• The Knesset will appoint two representatives on the Judicial Selections Committee. The Prime Minister is reportedly planning to allow the opposition to fill one of the seats, overriding advice from his Justice Minister Yariv Levin. A refusal to follow convention and allow the opposition to name on of the representatives could sink the ongoing negotiations on the judicial overhaul. According to a report circulated by Haarets, parties are looking to reach an interim agreement within the next few weeks.
• When this is being typed, spot USD/ILS trades at ILS3.5860, a touch higher on the day, which comes after it shed over 4% in the course of last week. A slide through Mar 28 low of ILS3.5287 would lend further support to the bearish case. On the flip side, bulls eye resistance from Jun 2 high of ILS3.7551, a cyclical peak.