Shekel Woes Continue After Key Judicial Overhaul Vote

The shekel extends its sharp sell-off and is the world's worst-performing currency today (out of all 152 currencies tracked by Bloomberg) on the back of continued fallout from yesterday's showdown in the Knesset, where the governing coalition passed the first major element of its controversial judicial overhaul into law.

• Local assets remain under pressure, with the market pricing additional political risk premium. Benchmark TA-35 Index has shed 2.3% today, with the TA-BANK5 Index down 3.8%.
• When this is being typed, USD/ILS trades at 3.7192, up 612 pips on the day. A clearance of Jun 30 high of 3.7308 would give bulls a green light for targeting Jun 2 cycle high of 3.7551.
• The adoption of the "reasonableness" bill drew international condemnation, raised the risk of an escalation in domestic protests against the judicial reforms, and provoked further pushback from Israel's reservists and security establishment.
• Prime Minister Benjamin Netanyahu expressed readiness for renewed talks with the opposition during the upcoming parliamentary recess, but his offer was met with scepticism across the aisle. Opposition leaders Yair Lapid and Benny Gantz reaffirmed their view that Netanyahu is under control of his far-right allies.