Mizrahi Tefahot Strategist Reviews US Bond Yields and Israeli Economy
Mizrahi Tefahot Bank chief strategist Yoni Pening outlines rising US bond yields, inflation pressures, and an Israeli economic slowdown in July offset by a September credit card recovery.
US Market Trends and Rising Yields
In his weekly economic review, Yoni Pening, chief strategist at Mizrahi Tefahot Bank, analyzed the US market, noting a continued and pronounced increase in bond yields. Unlike previous periods, rising oil prices are not the primary driver; rather, there is a distinct decline in global demand for US bonds. As a result, real yields have reached exceptionally high levels, even across short-term maturities.
"The US market exhibited another week of rising yields, and this was noticeable. This time, oil prices themselves are not the main factor, and at least to some extent, there is a drop in global demand for US bonds."
Inflation Outlook and Consumer Sentiment
Despite a certain stabilization in energy prices, recent increases combined with wider refining margins for gasoline and diesel are expected to push September price indices to unusual levels. This may temporarily neutralize high real yields. Meanwhile, consumer sentiment remains pessimistic, driven largely by very high fuel prices at the pump, though not yet reaching critical thresholds.
Israeli Economy: Weakness in July and Credit Card Recovery
In Israel, business revenue indices indicated noticeable weakness in July, likely driven by a surge in outbound international travel, which is expected to weigh on third-quarter economic activity. Conversely, September credit card data point to a recovery that is anticipated to persist throughout the year.
