Updated on July 5, 2022 10:03:25 AM EDT

Mays Factory Orders data was posted late this morning, starting this week’s calendar of events. The Commerce Department announced a 1.6% rise in new orders at U.S. factories that exceeded expectations of a 0.5% increase. The larger increase is a sign that manufacturing sector activity was stronger than thought last month, making the data bad news for rates. Fortunately, this report isn’t considered to be highly important, allowing the recent positive momentum in bonds to continue.

We only have two more monthly reports to watch this week, in addition to the minutes from last month’s FOMC meeting. As we are seeing this morning, stock swings can come into play at any time. Generally speaking, stock weakness usually translates into bond gains and lower mortgage rates.

Tomorrow doesn’t have any relevant economic data scheduled but we will get the June 14-15th FOMC minutes at 2:00 PM ET. There is a possibility of the markets reacting to them, but I dont believe they will reveal a significant surprise that we did not get from the post-meeting statement, revised economic projections and press conference last month. Bond traders are looking for feelings about inflation and the size and frequency of planned rate hikes to control it. If there is a reaction, it will come during mid-afternoon hours tomorrow.

Overall, Friday is best candidate for most important day for rates due to the significance of the monthly Employment report, but tomorrow afternoon may also be noticeably active if the FOMC minutes show some surprises. While we likely will not see the movement in rates we saw last week, there a couple days that could bring some volatility. Therefore, it would be prudent to keep an eye on the markets if still floating an interest rate and closing in the near future.

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