The play is set as contemporary to the time in which it was written (we know this because in the play, one of the Antonio’s ships is coming from Mexico, so it is necessarily after 1492), a time shortly after the beginning of the Inquisition (also 1492), when Ferdinand and Isabella expelled the Jews from Spain, and many Catholic countries followed suit. Venice, however, as a state, was resistant to the Inquisition, and while Jews were persecuted there, it was to a much lesser extent than in other Catholic countries, another instance of Venice resisting the authority of the church, as was the case in their adventures in the Crusades. Jews from Spain, France, and other parts of Italy fled to Venice. This may be why Shylock speaks strangely and is considered by Portia’s citation of the law to be an “alien.” The play doesn’t say he comes from another place. Perhaps Shakespeare knew about this refugee status, perhaps not.

I suppose it should be noted, as well, that in Shakespeare’s England, anti-Semitism was a crowd-pleaser in the theater, beginning with Christopher Marlowe’s play The Jew of Malta (1590), which is outrightly Jew hating, with his main character Barabbas more or less the blueprint for the clichéd craven money-grubber and scoundrel. (Which endures in English literature even into Dickens. Fagin, in Oliver Twist, is referred to repeatedly as “the Jew.”) A few years after The Jew of Malta appeared on the stage in 1594, Rodrigo Lopez, the queen’s doctor and a Jew, had been tried and beheaded by Queen Elizabeth for plotting to assassinate her. Elizabeth was a very popular monarch (almost by necessity, because she was pretty indiscriminate about cutting off the heads of people who didn’t like her), and so the public was happy to get their anti-Semitism on again with The Merchant of Venice (1596–1598). Compared with Barabbas, Shylock is, as they say, a mensch. (Shakespeare was less of a trendsetter than a trend follower. His King Lear followed a play called King Leir written four years prior by another playwright. It’s his genius for language, not his plotting, that has made his work immortal.)

So yes, in context, Shakespeare’s play is certainly less anti-Semitic than Marlowe’s, but Antonio is the protagonist of Merchant, the hero, if you will. He’s anti-Semitic through the play, and Shakespeare implies he is such because Shylock is practicing “usury,” or charging interest on money he loans. Talented directors and actors have portrayed Shylock as the sympathetic lead, though, in recent times, without altering a word of the text, and it’s really a credit to the craft of acting and directing that it can be done. Al Pacino’s Shylock in the 2006 film version of Merchant is a good example of a sympathetic Shylock, and filmed in Venice, it’s a pretty film to look at.