Bond Market Commentary

Over in bond land, Treasury yields are higher before the opening bell Monday ahead of today’s June factory orders and finalized durable goods orders. Investors are awaiting any updates on trade deals and tariffs, along with tomorrow’s June trade balance and July’s services purchasing managers’ index (PMI) from the Institute for Supply Management (ISM). As of 6:46 AM ET, the yield on the 10-year note is rising one basis point (0.01%) to 4.23%, while the 30-year bond yield is increasing two basis points (0.02%) to 4.84%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is up one basis point (0.01%) to 3.69%.

Treasury yields were lower on Friday as July’s nonfarm payrolls rose less than forecasted and the prior two months of gains were downwardly revised by a cumulative 258,000. Meanwhile, the unemployment rate ticked up to 4.2% while the labor force participation rate ticked down to 62.2%. The ISM manufacturing PMI for July fell further into contractionary territory and the prices paid component unexpectedly declined. The yield on the 10-year note was down 15 basis points (0.15%) to 4.22%, while the 30-year bond yield fell eight basis points (0.08%) to 4.82%. The yield on the two-year note decreased 28 basis points (0.28%) to 3.68%.

On the data front, June’s factory orders are expected to have decreased 4.8% month-over-month (MOM) versus the prior month’s increase of 8.2%. Meanwhile, June’s finalized durable goods orders are expected to show a 9.3% MOM decrease, unchanged from the prior reading.

In the auction space, the U.S. Treasury is set to issue $82 billion in thirteen-week bills and $73 billion in twenty-six-week bills.

Mortgage rates were lower in the latest week. For the week ending July 31, the average 30-year fixed mortgage rate was down two basis points (0.02%) to 6.72%, versus 6.73% a year ago. The 15-year fixed mortgage rate decreased two basis points (0.02%) to 5.85%, versus 5.99% a year ago.

The Bloomberg 30-day visible supply rose $170 million to $17.149 billion on Friday, above the 12-month average of $14.069 billion.

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