Fitch places Israel on rating watch negative as Gaza war rages

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Fitch on Tuesday placed Israel's sovereign debt rating of 'A+' on rating watch negative and warned a major escalation of the ongoing conflict with the Palestinian Islamist group Hamas could result in a negative rating action.

An Israeli flag, attached to a rock known as "Andromeda's Rock", flutters in the Mediterranean Sea as Tel Aviv's skyline of high-rise buildings is seen in the background, in Jaffa, Israel June 16, 2019. Picture taken June 16, 2019.

The ratings agency said the risk that others hostile to Israel could join the conflict at scale has risen significantly. Large-scale escalation, in addition to human loss, could result in significant additional military spending, destruction of infrastructure leading to a large deterioration of Israel's credit metrics, according to Fitch.in the cost of insuring Israel's government debt using what are known as credit default swaps . Investors use CDS either as a protection tool or to speculate and last week the cost of buying Israel CDS has surged 80%.

Israel has vowed to annihilate the Islamist group after Hamas gunmen crossed the border and killed 1,300 people, mainly civilians, during aRussia's parliament starts voting on Tuesday on withdrawing Moscow's ratification of the Comprehensive Nuclear Test Ban Treaty. Here is a look at some of the questions that raises.

 

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