Markets: 52% Chance Netanyahu Out as Knesset Vote Looms

Markets assigned a 52% probability that Benjamin Netanyahu will be out of office by the end of 2026, up from 48% a week earlier. The probability that Netanyahu will be the next prime minister after the next election remains around 40%, little changed in market pricing.

A bill to dissolve the Knesset is scheduled for a vote next week after opposition lawmakers moved to table it amid a coalition crisis over a bill to change conscription rules for ultra-Orthodox Israelis. Naftali Bennett has expressed approval of holding the vote.

Ultra-Orthodox factions withdrew support from the government over the conscription dispute, reducing the coalition’s majority. If the dissolution bill passes, national elections could be held before the current October 2026 date.

Prediction market contracts tied to whether Netanyahu will be out before 2027 show prices clustered near the 50% range for year-end outcomes. A contract for December 31 trades around 51–52%, reflecting traders’ higher odds of an early election following the recent political developments.

Political figures mentioned as potential challengers include Yair Lapid and Benny Gantz, who may seek broader coalitions if votes are called. Market watchers said they will follow the Knesset vote next week, statements from coalition partners and any negotiations that might alter the immediate political timeline.