Trading on the Tel Aviv Stock Exchange is being conducted on Thursday morning with sharp gains against the background of the gains recorded last night on Wall Street, following the Federal Reserve's announcement that it will move to interest rate cuts next year. The Tel Aviv 35 Index jumps by 2%, the Tel Aviv 125 Index by 2.25%.
Economy Minister Barkat locks down the New York Stock Exchange (Argion) // New York Stock Exchange
At the same time, the dollar weakened against the world's leading currencies and against the shekel, and was currently trading down by 1.5 percent at NIS 3.6550. The euro weakened by 0.5 percent to NIS 3.98.
"The depreciation began after yesterday's Fed interest rate decision, which surprised investors to some extent. The Fed did leave the interest rate unchanged, as expected. But the Fed members' expectations report states that 3 interest rate cuts are expected next year, much more than they expected the last time the report was published in September, when they expected about 5.1%," explains Kobi Levy, head of Leumi's Market Strategy Desk.
"The Fed chairman's speech was also quite balanced, noting his satisfaction with achieving the Fed's two mandates: price stability, while maintaining stability in the labor market. In relation to his past speeches, Powell has been more open to the possibility of cutting interest rates, and his rhetoric seemed to balance more between the possibility of cutting rates and the possibility that he attributed to the possibility that interest rates would not go down or even rise."
The dollar against the shekel (illustration), photo: GettyImages
Levy adds, "The US market almost certainly represents an interest rate cut in March 2024."
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