Thursday’s bond market has opened slightly in positive territory following mixed economic news. Stocks are rallying with the Dow up 441 points and the Nasdaq up 187 points. The bond market is currently up 1/32 (4.47%), which should keep this morning’s mortgage pricing close to Wednesday’s early rates.

The most important of today’s three economic releases was June’s Employment report at 8:30 AM ET. It revealed only 57,000 new jobs were added to the economy last month, falling well short of the 114,000 that was expected. This headline number is good news for bonds and mortgage rates because it shows employment growth may be slowing and could help delay or prevent the Fed from raising key rates in the immediate future. However, on the negative side was an unexpected decline in the U.S. unemployment rate that slipped from May’s 4.3% to 4.2% last month. Declining unemployment is a sign of strength in the sector that makes bonds less appealing to investors.

Another major headline reading in the report was the 0.3% increase in average hourly earnings that matched forecasts. The annual increase also didn’t come as a surprise with a 3.5% year-over-year rise. Bonds are particularly sensitive to earnings data because rising wages easily fuels inflation across the broader economy. We are labeling this component of the report neutral for rates.

Last week’s unemployment figures came in lower than expected. The 8:30 AM ET release showed 215,000 new claims were filed last week compared to the previous week’s revised 216,000 initial filings. The size of the weekly change isn’t a big deal to the markets. That said, we have to consider the report unfavorable for rates since forecasts were calling for an increase of 5,000 new filings. Rising claims are a sign of weakness in the employment sector, meaning good news would have been a number above forecasts.

Closing out this week’s calendar was May's Factory Orders data at 10:00 AM ET. This report showed a 1.3% decline in new orders at U.S. factories for durable and non-durable goods. The decline is a sign of weakness in the manufacturing sector, but a good portion of the data was already released in last week’s Durable Goods Orders report. Without a significant variance in data that covers May instead of June, we are labeling the report neutral. It has not had an impact on this morning’s bond trading or mortgage pricing.

The bond market will close early today ahead of tomorrow’s Independence Day holiday and will reopen Monday morning for regular trading. Stocks will trade a full day today before closing tomorrow also. These early closings ahead of an extended holiday weekend sometimes leads to pressure in bonds as traders look to protect themselves from geopolitical headlines over the longer than normal period of closure. It shouldn’t lead to a noticeable increase in rates this afternoon, but the possibility of an additional move from this morning’s pricing does exist.

Since the markets are closed tomorrow and there is no relevant economic data being released, we will not be updating this report tomorrow. We would like to wish you and yours a safe and wonderful holiday weekend!

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.