Housing Tax Cut Stalls Region-Beating Bond Rally: Israel Markets
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Prospects of a housing tax cut have slammed the brakes on a local currency bond rally as investors bet the plan signals an end to Israel’s monetary expansion.
The yield on the country’s shekel-denominated bonds due March 2023 climbed five basis points since the government said March 18 it may scrap value-added-tax for first-time buyers in a bid to boost home ownership. That compares with a nine basis-point drop for Middle East bonds, according to JPMorgan Chase & Co. indexes. Israeli notes returned 14 times the regional average last year, according to data compiled by Bloomberg.