Leader Capital Markets Ltd. states in its weekly survey that the bond market is jittery about high inflation following the 0.5% rise in the Consumer Price Index (CPI) in March and the sharp increase in the money supply. The investment house adds that it also unclear to what extent the Bank of Israel was active in the market during the week-long Passover holiday.
Leader notes that mid-term bonds reflect a 3% differential between inflation expectations and actual inflation. "This is a fairly high differential, which results in a preference for unlinked shekel bonds," it says.
Union Bank states in its weekly market survey, "We believe that the positive momentum in the markets will continue in the short term. However, we are reiterating our recommendation to keep exposure to stocks at 10% of low-risk investment portfolios and 30% of speculative investment portfolios."
Union Bank believes that the Bank of Israel will raise the interest rate in the medium term, and therefore advises investment in short and medium-term unlinked shekel deposits.
Union Bank revised its inflation forecast downward to 0.9% from 1% for the April CPI and its 12-month inflation forecast is 1.4%.
Union Bank says that the closest support level for the shekel-dollar exchange rate is NIS 4.13/$ and the closes resistance level is NIS 4.20/$.
Published by Globes [online], Israel business news - www.globes-online.com - on April 19, 2009
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