Israel's Shekel and Bonds Slide as Gaza Ceasefire Buckles

New Israeli Shekel banknotes are seen in this picture illustration taken November 9, 2021. REUTERS/Nir Elias/Illustration/File photo
New Israeli Shekel banknotes are seen in this picture illustration taken November 9, 2021. REUTERS/Nir Elias/Illustration/File photo
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Israel's Shekel and Bonds Slide as Gaza Ceasefire Buckles

New Israeli Shekel banknotes are seen in this picture illustration taken November 9, 2021. REUTERS/Nir Elias/Illustration/File photo
New Israeli Shekel banknotes are seen in this picture illustration taken November 9, 2021. REUTERS/Nir Elias/Illustration/File photo

Israel's currency fell alongside its bonds and stock market on Tuesday as a wave of deadly airstrikes by its military in Gaza threatened the complete collapse of an already fragile two-month ceasefire with Hamas.

Concerns about both the humanitarian and economic costs of a return to intense fighting spiked as Israel's resumption of bombing of Gaza, which it said was a "preemptive offensive" to try to force the release of its remaining hostages, prompted anger from Hamas.

Israel's shekel dropped as much as half a percent against both the dollar and euro, while many of its government bonds, which suffered a wave of rating downgrades last year due to the war, had their biggest falls in over a month, Reuters reported.

Ronen Menachem, chief markets economist at Mizrahi Tefahot Bank, said a resumption in the conflict could see further falls in the shekel and a renewed rise in Israel’s bond market risk premium.

"The market will react based on whether this is perceived as a defined and limited operation or the opening of a broader campaign," he said.

Israel's Prime Minister Benjamin Netanyahu said he had instructed the military to take Tuesday's "strong action" in response to Hamas's refusal to release the remaining 59 hostages it holds following its October 7, 2023 attacks and its rejection of other ceasefire proposals.

The Palestinian militant group accused Netanyahu of breaching the ceasefire deal and jeopardizing efforts by mediators to secure a permanent truce.

Negotiating teams from Israel and Hamas had been in Doha as mediators from Egypt and Qatar sought to bridge the gap between the two sides after the end of an initial phase in the ceasefire, in which 33 Israeli hostages and five Thais were released in exchange for some 2,000 Palestinian prisoners.



Egypt Seeks Up to 60 LNG Shipments

A general view of the Nile River from the Egyptian capital, Cairo (Reuters).
A general view of the Nile River from the Egyptian capital, Cairo (Reuters).
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Egypt Seeks Up to 60 LNG Shipments

A general view of the Nile River from the Egyptian capital, Cairo (Reuters).
A general view of the Nile River from the Egyptian capital, Cairo (Reuters).

Egypt is in advanced talks with global energy and trading firms to secure between 40 and 60 shipments of liquefied natural gas (LNG), aiming to meet urgent energy needs before summer demand peaks, according to sources familiar with the matter cited by Reuters.
Cairo is negotiating with companies including Saudi Aramco, Trafigura, and Vitol for LNG supply deals extending through 2028, signaling a strategic shift from exporter to long-term importer amid declining domestic production, Asharq Bloomberg reported.
Sources say the Egyptian Natural Gas Holding Company (EGAS) has received 14 bids for supply contracts ranging from 18 months to three years. The rising demand this year could push Egypt’s monthly LNG import bill to nearly $3 billion starting in July, up from approximately $2 billion last year.
This move reflects Egypt’s effort to lock in long-term contracts to reduce exposure to volatile spot market prices. It also underscores the country’s deepening energy challenges: a sharp drop in gas production, increasing population, and soaring summer temperatures are straining domestic supply and forcing reliance on global markets.
Contract awards are expected next week. Plans call for 110 LNG shipments in the second half of 2025, 254 in 2026, and 130 in the first half of 2027.
One source said bids price LNG at 80 to 95 cents per million British thermal units (MMBtu) above the European benchmark, with payment deferrals of up to 180 days. European gas futures currently trade at about $12 per MMBtu, though LNG cargoes typically sell at a discount.
Egypt is also expanding infrastructure, including the addition of floating storage and regasification units, and is negotiating long-term supply deals with Qatar.
A recent Goldman Sachs report estimated Egypt’s 2024 energy deficit at over $11.3 billion, doubling the current account shortfall to 6.2% of GDP, compared to 3.2% the previous year.
President Abdel Fattah al-Sisi has directed the government to preempt power outages this summer, according to a presidential statement this week.
A government source told Reuters Egypt is also considering importing at least 1 million tons of fuel oil, though LNG remains the preferred option due to its more flexible financing.
With gas output in February hitting its lowest level in nine years, Egypt imported 1.84 million tons of LNG in early 2025—roughly 75% of total 2024 imports, according to S&P Global Commodity Insights.