Tuesday, August 03, 2021


Updated on August 3, 2021 10:04:05 AM EDT

Junes Factory Orders data was posted late this morning, revealing a 1.5% increase in new combined orders at U.S. factories for durable and non-durable goods. This was stronger than the 0.9% rise that was expected, making the news a negative for mortgage rates. However, this report is considered to be low-to-moderately important, preventing it from having a noticeable impact on this morning’s pricing.

Bonds are obviously not reacting to this morning’s economic data. It appears the recent positive momentum is still in place. Although, in my opinion, it appears to be losing steam. Don’t be surprised to see some pressure ahead of Friday’s key Employment report, especially if tomorrow’s related data shows unfavorable results.

Tomorrow morning brings us Julys ADP Employment report before the markets open. It has the potential to cause some movement in the markets if it shows much stronger or weaker numbers. This report tracks changes in private-sector jobs, using their payroll processing clients as a base. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not very accurate in predicting results of the monthly government report that follows a couple days later. Still, because we sometimes see a noticeable reaction to the report, it is on this weeks calendar. Forecasts show 675,000 payrolls were added back to the economy. The bond and mortgage markets would prefer to see a smaller increase.

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