Shekel Holds Steady as Wall Street Drops and U.S. Bond Yields Plunge
Local forex trading shows minor movements as the dollar trades at 3.110 shekels and the euro at 3.488 shekels. Markets react to Wall Street drops and plunging U.S. yields.
Local Foreign Exchange and Global Markets Update
Local foreign exchange trading opened with minor movements, with the U.S. dollar trading at 3.110 shekels and the euro at 3.488 shekels, both showing no change against the Israeli currency. Meanwhile, the pound strengthened by 0.1% to 4.165 shekels. Globally, the euro traded stably at $1.1215, while the pound held steady at $1.3392. The dollar rose 0.1% against the Japanese yen to 156.95 yen, and the Dollar Index climbed 0.1% to 101.505 points.
Wall Street Declines and Treasury Yields Plunge
Trading followed sharp drops on Wall Street, driven by renewed concerns over the scale of investments in artificial intelligence and the financing needs of tech firms. The Nasdaq tumbled 2.6% in its worst day since June, and the S&P 500 lost 1.2%. Stock market declines, alongside rising oil prices, drove investors toward U.S. government bonds.
The 10-year Treasury yield plunged by more than 20 basis points to 4.945%, falling below the 5% threshold for the first time since September 23. This marked the sharpest daily drop in yield since March 10, 2023. The two-year yield dropped 20 basis points to 4.629%, while the 30-year yield fell nearly 15 basis points to 5.293%.
Oil Prices and Interest Rate Decisions
Oil prices continued climbing after surging 4% to a five-month high amid escalating clashes between Saudi Arabia and the Houthis, raising energy supply concerns. In Israel, trading followed the Bank of Israel decision to keep the interest rate unchanged at 3.25%. Annual inflation stood at 1.6% in September, though high energy prices and local uncertainty remain focal points.
"Another surge in oil prices could increase inflation expectations, burden bond markets, and delay monetary easing in the U.S. and Europe," noted Yossi Menashe, founder and co-CEO at Altshuler Shaham Financial Services.
