Market Commentary

Updated on August 4, 2020 10:17:10 AM EDT

June's Factory Orders report was posted at 10:00 AM ET this morning, revealing a 6.2% rise in new orders. This was stronger than the 5.2% increase that was expected and indicates strength in the manufacturing sector but was not enough of a variance to cause much concern in the bond market or derail this morning's early bond gains.

Tomorrow has a single relevant economic report that may influence rates. That will be July's ADP Employment report at 8:15 AM ET. 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 week's calendar. Forecasts show an increase of 1.8 million new payrolls as businesses and states continued to reopen from the pandemic shutdown. The bond and mortgage markets would prefer to see a smaller increase.

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