Before the market opens on Friday, Treasury yields are taking a dip, likely influenced by anticipation for July’s job report and June’s factory and durable goods orders. The yield on the 10-year note is down by four basis points, settling at 3.94%. The 30-year bond yield is also experiencing a four-basis-point drop, reaching 4.24%. The two-year note, which is more sensitive to changes in monetary policy, shows a decrease of three basis points, currently at 4.12%. This dip in yields suggests investors are seeking safety in bonds as they await these key economic reports.

This trend of lower yields follows a similar pattern from the previous day. On Thursday, investors reacted to data that indicated a continued slowdown in manufacturing activity. The Institute for Supply Management’s manufacturing Purchasing Managers’ Index (PMI) dipped further into contractionary territory, a signal of economic weakness. Adding to this, both initial and continuing jobless claims rose above expectations. As a result, the yield on the 10-year note fell by five basis points to 3.98%, while the 30-year bond yield decreased by two basis points to 4.28%. The two-year note showed a more substantial decline, falling 11 basis points to 4.15%.

Key Economic Data and Projections

Today’s economic calendar is packed with important data releases. The most anticipated report is the July jobs report, which is expected to show an increase in non-farm payrolls of 175,000 month-over-month. This would be a slight decrease from the previous month’s gain of 206,000. In the manufacturing sector, payrolls are projected to fall by 5,000 month-over-month, following a decrease of 8,000 in the previous month. The private sector is anticipated to add 140,000 jobs, a slight increase compared to the prior month’s gain of 136,000.

The unemployment rate for July is predicted to remain unchanged at 4.1%, while the labor force participation rate is expected to hold steady at 62.6%. Average hourly earnings are anticipated to rise by 0.3% month-over-month and 3.7% year-over-year. This would represent a slowdown in wage growth, compared to the prior month’s year-over-year increase of 3.9%.

Further down the economic calendar, June’s factory orders are expected to show a decrease of 3.2%, a significant drop from the previous month’s decline of 0.5%. The final release of June’s durable goods orders is projected to decrease by 6.6%, unchanged from the initial estimate.

Central Bank Commentary and Mortgage Rates

Today, central bank watchers will be listening closely to speeches by Chicago Federal Reserve President Austan Goolsbee and Richmond Fed President Thomas Barkin. Their remarks may provide clues about the Federal Reserve’s future monetary policy decisions.

In the mortgage market, rates took a downward turn last week. The average 30-year fixed mortgage rate dropped five basis points to 6.73%, compared to 6.90% a year ago. The 15-year fixed mortgage rate decreased eight basis points to 5.99%, down from 6.25% a year ago. Lower mortgage rates could offer some relief to homebuyers, but it remains to be seen if this trend will continue.