Aug 26, 2012 9:56 AM ET–Israel’s benchmark government bonds fell, pushing yields higher for the first time in more than a week, on investor bets the Bank of Israel will keep interest rates unchanged tomorrow as economic growth accelerates.
The yield on the 5.5 percent notes due January 2022 increased for the first time since Aug. 16, gaining one basis point, or 0.01 percentage point, to 4.14 percent at the close in Tel Aviv. The central bank’s monetary policy committee, led by Governor Stanley Fischer, will hold interest rates at 2.25 percent, according to 21 out of 25 economists surveyed by Bloomberg News. Four economists forecast borrowing costs will fall by 25 basis points.
Israeli economic growth accelerated for the first time in a year and a half in the second quarter, driven by an increase in exports and consumer spending. The economy expanded an annualized 3.2 percent compared with a revised 2.8 percent in the first three months of the year, the Jerusalem-based Central Bureau of Statistics said Aug. 16.
“Economic growth in the second quarter was fairly robust and some of the recent global economic data point to signs of stability which gives the central bank less of a reason to lower interest rates tomorrow,” said Jonathan Katz, a Jerusalem-based economist for HSBC Holdings Plc. “This environment is pushing government bond yields up.”…Read More>>