Israeli President Isaac Herzog is expected to ask Benny Gantz's rival-bloc figure Gadi Eisenkot to attempt forming a government next week, according to Kan public broadcaster, signaling a procedural step in the coalition-building process that typically follows an inconclusive election. The transmission mechanism for Israeli assets runs chiefly through political risk premia: a new mandate raises the probability of a more centrist or fragmented coalition, which can compress the premium investors demand for policy uncertainty in fiscal and security spending. Israeli shekel-denominated government bonds and the Tel Aviv equity benchmark are the most directly exposed, since sovereign spreads and sector valuations in defense, construction and banking are sensitive to expectations about budget direction and reform timelines. Traders should watch whether Eisenkot secures commitments from enough parliamentary blocs within the statutory window, as a credible path to a majority would likely narrow the political-risk discount, while a failed mandate would push the question toward a further electoral round and extend uncertainty. The next concrete marker is the formal designation announcement an
ISRAEL'S HERZOG EXPECTED TO TASK EISENKOT WITH GOVERNMENT FORMATION NEXT WEEK - KAN
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