May 3, 2024
Over in bond land, Treasury yields are mostly lower before the opening bell Friday as investors await the release of April’s jobs report and Purchasing Managers’ Indexes (PMIs). The yield on the 10-year note is decreasing two basis points (0.02%) to 4.56%, while the 30-year bond yield is also falling two basis points (0.02%) to 4.71%. The yield on the two-year note, which is more sensitive to changes in monetary policy, is unchanged at 4.87%.
Treasury yields were lower on Thursday, with March’s factory orders and the final release for durable goods orders both increasing in line with expectations. Investors also evaluated the initial readings for the first quarter’s non-farm productivity and unit labor costs. The former increased less than expectations, while the latter increased more than projections. The yield on the 10-year note was down five basis points (0.05%) to 4.58%, while the 30-year bond yield fell two basis points (0.02%) to 4.73%. The yield on the two-year note decreased nine basis points (0.09%) to 4.87%.
On the data front today, non-farm payrolls are expected to increase by 240,000 month-over-month (MoM) in April, down from the prior month’s increase of 303,000, while April’s manufacturing payrolls are projected to increase by 5,000 MoM versus the prior month’s stagnation. Meanwhile, private payrolls are anticipated to increase by 195,000 MoM versus the prior month’s increase of 232,000. The unemployment rate is expected to register 3.8% for April, unchanged from the prior month’s reading, while April’s labor force participation rate is expected to be 62.7%, also unchanged from the prior month’s reading. April’s average hourly earnings is expected to increase 0.3% MoM and 4.0% year-over-year (YoY), similar to and down from the prior month’s increases of 0.3% and 4.1%, respectively. The final reading for April’s S&P Global Services PMI is expected to register 51.0, up slightly from the prior reading of 50.9, while the final reading for April’s S&P Global Composite PMI is also projected to register 51.0 versus the prior reading of 50.9. April’s Institute for Supply Management (ISM) Services PMI and the prices paid component are anticipated to record 52.0 and 55.0, respectively, versus the previous month’s readings of 51.4 and 53.4, respectively.
In the central bank space, Chicago Federal Reserve (Fed) President Austan Goolsbee and New York Fed President John Williams are scheduled to speak today.
Mortgage rates were higher in the latest week. For the week ending May 2, the average 30-year fixed mortgage rate was up five basis points (0.05%) at 7.22%, versus 6.39% a year ago. The 15-year fixed mortgage rate increased three basis points (0.03%) to 6.47%, versus 5.76% a year ago.
Municipal Market Commentary
None at this time.
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