While Israel’s economy bleeds, international banking giants are capitalizing on every market swing.
JPMorgan Chase leads the vultures’ feast, having already extracted $70 million from Israel-related trades this year alone. Goldman Sachs and Citigroup have also carved out their slice of wartime profits, dominating trading in Israeli fixed-income securities.
As for the shekel, traders are riding a wave of unprecedented volatility, with price swings surpassing levels last seen during October’s crisis and leaving even euro market turbulence in the dust.
As for the shekel, traders are cashing in on unprecedented volatility, even outpacing the traditional instability of the euro. Even Wednesday’s Israel-Hezbollah ceasefire agreement has created profitable trading opportunities, with the shekel strengthening 3% against the dollar.
Market analysts at Vali Analytics note that while the top 10 global banks expect flat overall trading revenue for 2024, their Israel-related profits continue to soar as these financial titans are projected to collect $475 million in 2024 from trading Israeli bonds and currency – a figure that’s swelled over 10% since Hamas terrorists attacked Israel 13 months ago.
“Israeli currency volatility has increased as a result, first of more divided politics and concerns over institutional stability with the controversial judicial reform and then, obviously, the war on multiple fronts,” equity strategist Hasnain Malik tells Reuters.
“That volatility suits banks whose spreads widen but hurts operating businesses exposed to imported inputs or exported finished products.”
Wall Street’s windfall stands in stark contrast to the economic pain gripping Israel, where businesses face surging inflation and skyrocketing borrowing costs. S&P’s latest projections predict a 0.2% contraction this year followed by an anemic recovery through 2026. Israel’s defensive war’s fiscal impact is even more stark as deficits are projected to hit a staggering 9% before gradually subsiding over the next two years.
