Wednesday's bond market has opened in negative territory following stock gains during morning trading. The stock markets are in positive territory with the Dow up 60 points and the Nasdaq up 30 points. The bond market is currently down 7/32, but we likely will still see an improvement in this morning's mortgage rates due to strength in bonds during afternoon trading yesterday.

The Labor Department said that this morning that the 1st Quarter Productivity and Costs reading actually rose at a 2.6% annual pace. This was slightly more than was expected, but is good news for bonds and mortgage rates. The preliminary reading showed a 2.2% pace and forecasts were calling for an upward revision to 2.5%. This means that workers were a little more productive during the quarter than what was thought. That is considered to be favorable to bonds and mortgage rates because strong levels of productivity are believed to allow the economy to grow without inflation concerns .

The second report of the day was the Institute for Supply Management's Services Index late this morning. It revealed a reading of 51.7 that was higher than expected, but lower than last month's 52.0 reading. Accordingly, this data has little impact on bond trading or mortgage rates this morning.

There is no relevant data scheduled for release tomorrow except for weekly unemployment figures from the Labor Department. They are expected to say that 372,000 new claims for unemployment benefits were filed last week, matching the previous week's total. Generally speaking, this data usually does not have an impact on mortgage rates because it tracks only a week's worth of claims. This may be the case again tomorrow, however, with Friday's monthly report coming out any sizable surprise could influence expectations for Friday's release and lead to changes in mortgage rates.

The Labor Department will post May's Employment data early Friday mornin g. This report gives us key employment readings such as the U.S. unemployment rate and the number of jobs added or lost during the month. Analysts are expecting to see the unemployment rate climb to 5.1% with approximately a loss of 60,000 jobs during the month. A higher than expected increase in the unemployment rate and a larger drop in payrolls would be great news for the bond market. It would probably create a sizable rally in bonds, leading to lower mortgage rates Friday. But, if we see stronger than expected numbers, we will likely get a spike in mortgage rates. Accordingly, proceed with caution if still floating an interest rate.

Tuesday's bond market has opened in positive territory following the release of much weaker than expected economic data. The stock markets are showing losses with the Dow down 71 points and the Nasdaq down 22 points. The bond market is currently up 12/32, which will likely improve this morning's mortgage rates by approximately .125 of a discount point.

The Conference Board posted June's Consumer Confidence Index (CCI) late this morning, revealing a reading of 50.4. This was much lower than the forecasted reading of 56.0 and was the lowest reading since February 1992. This indicates that consumers are much less optimistic about their own financial situations than many had thought. That is considered good news for bonds and mortgage rates because the falling confidence usually means consumers are less apt to make large purchases in the near future. With consumer spending making up two-thirds of the U.S. economy, any related data often has a big impact on t he markets.

The only important release scheduled for tomorrow is May's Durable Goods Orders, which gives us an indication of manufacturing sector strength. It is known to be quite volatile from month to month and is expected to show no change new orders from April to May. A decline in new orders would be the ideal scenario for the bond market and could lead to a decline in mortgage pricing tomorrow morning. However, tomorrow afternoon's events will probably influence rates much more than the day's data will.

There are two housing related reports scheduled for release this week, with the first coming tomorrow morning. May's New Home Sales will be released tomorrow while Existing Home Sales will be posted Thursday morning. These reports give us a measurement of housing sector strength and mortgage credit demand, but usually do not cause much movement in mortgage rates.

The FOMC meeting that began today will adjourn tomorrow afternoon. It is wi dely expected that Mr. Bernanke and company will not change key short-term interest rates at this meeting. But, as we have seen so many times in the past, it is the post meeting statement that often creates the most volatility in the markets. They could give an opinion of the overall economy, hinting at a possible future move or lack of one. Statements like these could cause a knee-jerk reaction in the markets and possibly mortgage pricing tomorrow afternoon. I suspect we will hear concerns about inflation that will lead to selling in bonds that will drive mortgage rates higher.

Monday's bond market has opened down sharply as investors turn away from inflation sensitive investments. The stock markets are mixed by a wide margin with the Dow up 110 points and the Nasdaq down 14 points. The bond market is currently down 30/32, which will likely push this morning's mortgage rates higher by approximately .250 - .375 of a discount point. I also would not be surprised to see further upward revisions sometime today as the bond market appears likely to continue its selling.

There was no relevant economic news released today. The week's first but least important data is April's Goods and Services Trade Balance report tomorrow morning. This report gives us the size of the U.S. trade deficit and will be released at 8:30 AM. It isn't likely to cause much movement in the markets or mortgage rates, but nevertheless forecasts are expecting to see a $59.5 billion deficit.

Late Wednesday, the Federal Reserve will release its Beige Book. This data details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve during FOMC meetings when determining monetary policy. If it shows slowing economic activity, the bond market may thrive and mortgage rates could drop shortly after the 2:00 PM ET release. If it reveals signs of inflation growing, we could see mortgage rates revise higher Wednesday afternoon.

Overall, it is going to be a fairly busy week for the financial markets. I feel that Friday will be the single most important day of the week with the release of the CPI, but Thursday also is likely to bring significant movement in rates due to the Retail Sales report being released. Accordingly, this would be a very good week to maintain fairly constant contact with your mortgage professional.

Thursday's bond market has opened in negative territory again as investors prepare for tomorrow's big news. Also hurting bonds this morning are sizable stock gains that has the Dow up 128 points and the Nasdaq up 30 points. The bond market is currently down 8/32, which with yesterday's late sell-off, will push this morning's mortgage higher by approximately .500 of a discount point compared to yesterday's morning rates.

The only data posted this morning was last week's unemployment claims. The Labor Department said that 357,000 new claims for benefits were filed last week. This was lower than the 372,000 that was expected and created some concern in the bond market that tomorrow's monthly report may reveal stronger than expected numbers.

The Labor Department will post May's Employment data early tomorrow morning. This report gives us key employment readings such as the U.S. unemployment rate and the number of jobs added or lost during the month. Analysts are expecting to see the unemployment rate climb to 5.1% with approximately a loss of 60,000 jobs during the month. A higher than expected increase in the unemployment rate and a larger drop in payrolls would be great news for the bond market. It would probably create a sizable rally in bonds, leading to lower mortgage rates tomorrow.

But, if we see stronger than expected numbers in tomorrow's results, we will likely see bonds tumble and mortgage rates spike higher. There is little doubt that tomorrow's news will create volatility in the markets and quite possibly mortgage pricing. Accordingly, proceed with caution if still floating an interest rate.