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⑴ Spain will auction 7-year, 10-year, and 14-year government bonds on Thursday, with a total scale of about 5 to 6 billion euros. The current index dynamics are favorable and demand for Spanish government bond auctions has historically been strong. ⑵ This month, about 74 billion euros of eurozone government bonds have flowed out from major bond indices, slightly below the monthly average of 75 billion euros so far this year. At the end of the month, investors will reallocate the proceeds from these sales, providing support for auctions by various eurozone issuers. ⑶ Spanish auctions usually perform well, due to reasons such as the higher value of green shoe options amid current market volatility, the relatively insufficient liquidity in Spain’s secondary market making auctions an important channel to buy bonds, and Spanish government bonds serving as alternatives to similar-yielding bonds from other countries that are issued less frequently. ⑷ Demand for the 14-year variety is expected to come from scarcity in some parts of the market, and combined with the issuer’s ability to allocate bonds, this auction is likely to receive strong subscription.

⑴ Futures tracking the Canadian S&P/TSX Composite Index edged lower on Wednesday as the market awaits more details on the US-Iran peace agreement and further signals regarding the outlook for Federal Reserve monetary policy. ⑵ Trump stated that the memorandum of understanding with Iran is not a final agreement, but oil prices remain near three-month lows due to expectations that passage through the Strait of Hormuz will resume, while the International Energy Agency warned of a supply surplus next year. ⑶ Canadian government bond yields dipped slightly as concerns over inflation driven by energy eased, providing some support for the banking sector and the index as a whole. ⑷ Investors are awaiting Federal Reserve’s new Chair Walsh’s first policy decision, with the general consensus that interest rates will remain unchanged. The wording of the decision and economic forecasts will be the market's focal points for risk appetite.

Glonghui, June 17 — U.S. retail sales in May rose more than expected, but as the support from large tax refunds in offsetting rising prices gradually weakens, future growth momentum may slow down. The U.S. Department of Commerce Census Bureau announced on Wednesday that retail sales in May increased by 0.9% month-on-month, surpassing the market expectation of 0.5%. Part of the sales growth in May reflects that rising gasoline prices boosted gas station revenues. Affected by the war in Iran, gasoline prices once rose to the highest level in four years. Since then, oil prices have retreated, and this week the average retail gasoline price in the U.S. fell below $4 per gallon for the first time since April. Tax refund funds together with rising stock markets have supported consumer spending, but part of this consumption growth has come at the expense of reduced savings. The savings rate in April fell to its lowest level in four years. Core retail sales, which exclude automobiles, gasoline, building materials, and food services, grew by 0.7% in May, compared to an increase of 0.5% in April. Core retail sales most closely align with the consumer spending component in GDP. The tax filing season has ended, and most tax refund funds have been used up. Economists at PNC Financial said an analysis of internal data shows that "households are spending tax refund funds faster than in previous years, and increased gasoline spending is the main reason for this difference."