Wednesday's bond market has opened in negative territory following sizable stock gains. Stocks are rallying with the Dow up 11 points and the Nasdaq up 25 points. The bond market is currently down 9/32, which will likely push this morning's mortgage rates higher by approximately .125 - .250 of a discount point.

There is no relevant economic data scheduled for release today. The Labor Department will post weekly unemployment figures tomorrow morning, but unless they show a much higher or lower number they will likely have little impact on mortgage rates. They are expected to show 320,000 new claims were filed.

The week's most important news will come Friday morning when the Commerce Department will post July's Durable Goods Orders. This will give us an important measure of manufacturing sector strength. This data tracks orders at U.S. factories for big-ticket items, or products that are expected to last three or more years. A smaller increase than the expected 1.0% rise would indicate that the manufacturing sector is not as strong as thought. This would be good news for bonds and should lead to lower mortgage rates.

Also scheduled for release Friday is July's New Home Sales data. This report is the least important release of the week. It will give us an indication of housing sector strength and mortgage credit demand, but usually doesn't have a major impact on bond prices or mortgage rates. If it indicates that the housing sector is still rapidly weakening, it may help push bond prices higher and mortgage rates slightly lower. But with the Durable Goods report being of much more significance to the markets, it will likely influence mortgage rates much more then the housing report will.

Friday's bond market has opened in negative territory after this morning's economic news showed stronger than expected results. The stock markets have reacted favorably to the data with the Dow up 115 points and the Nasdaq up 20 points. The bond market is currently down 5/32, which will likely push this morning's mortgage rates higher by approximately .250 of a discount point.

This morning's first piece of news was July's Personal Income and Outlays data. It showed stronger than expected results with a 0.5% rise in income and a 0.4% increase in spending. Analysts had forecasted 0.3% increases in both readings, meaning that consumers' ability to spend and actual spending were both higher than thought. This is bad news for bonds and mortgage rates.

The second release was July's Factory Orders data that showed a 3.7% rise in new orders. The third piece of data was the revision to the University of Michigan Index of Consumer Sentiment for August. It revealed a reading of 83.4, which was close to the initial estimate of 83.3. Both of these reports showed slightly higher than expected readings, indicating that economic activity was stronger than thought.

Fed Chairman Bernanke made a speech this morning that traders were watching closely. However, as expected, he didn't tell us anything we really didn't know already. Key points were that the housing sector is expected to continue to weaken and that the Fed was ready to act if needed. This was the opinion of many analysts and traders already, so his words haven't had a significant impact on the markets this morning.

The bond market will close at 2:00 PM this afternoon ahead of Monday's Labor Day Holiday. The stock and bond markets will be closed Monday in observance of the holiday and will reopen Tuesday morning.

Next week brings us the release of a couple of key economic reports, beginning with Tuesday's ISM manufacturing index. The week's agenda also includes productivity numbers and the almighty Employment report. Look for more details on next week's activities in Sunday's weekly preview.

Thursday's bond market has opened in positive territory after this morning's economic news failed to show any negative surprises. The stock markets are mixed with the Dow down 17 points and the Nasdaq up 15 points. The bond market is currently up 9/32, but we will still see an increase in this morning's mortgage rates of approximately .250 of a discount point due to weakness in bonds late yesterday. During late afternoon trading yesterday, bonds fell as the major stock indexes rallied.

The Commerce Department said this morning that the Gross Domestic Product (GDP) actually stood at a 4.0% annual rate during the 2nd Quarter. This was a sizable upward revision from the previous estimate, but matched forecasts. Also, a key inflation reading in the report remained at its previous estimate, which had been well below what analysts had expected when the initial estimates were posted last month. The lack of an upward change to that reading has helped boost bond prices this morning.

The Labor Department said that 334,000 new claims for unemployment benefits were field last week. This was well above the 320,000 that were expected. Unfortunately, this data is not look at as important, so its impact ton bonds and mortgage rates was minimal.



Tomorrow brings us the release of three pieces of economic news. They are July's Personal Income and Outlays, Factory Orders and the University of Michigan Index of Consumer Sentiment posting. The income and spending data measures consumer ability to spend and current spending habits. It is expected to show an increase of 0.3% in income and a 0.3% increase in spending. Weaker than expected numbers would be good news for the bond market and mortgage rates.

The second report of the day is July's Factory Orders data. This report measures manufacturing sector strength and is similar to last week's Durable Goods Orders, but includes orders for both durable and non-durable goods. This data is expected to show a 3.0% increase in new orders. A smaller than expected rise should lead to lower mortgage rates tomorrow, especially if the income and spending report reveals weaker than expected readings.

August's revision to the University of Michigan Index of Consumer Sentiment is also due tomorrow morning. It gives us a measurement of consumer willingness to spend. It is expected to show a slight downward revision from August's preliminary reading of 83.3. If it revises lower, consumers were less confident about their personal financial situations than previously thought. This would be good news for the bond market and mortgage rates.

Also worth noting is an early close in the bond market ahead of Monday's Labor Day Holiday. The bond market will close at 2:00 PM tomorrow while the stock markets should be open all day. The stock and bond markets will be closed Monday and will reopen Tuesday morning. This could lead to additional volatility in the markets, and possibly mortgage pricing, as investors prepare for the long holiday.

Wednesday's bond market has opened down slightly after the stock markets opened with strong gains. Stocks are rebounding from yesterday's sell-off with the Dow up 120 points and the Nasdaq up 30 points. The bond market is currently down 4/32, but we will likely see a slight improvement in this morning's mortgage rates due to late strength yesterday.

There is no relevant economic news scheduled for release today. This will leave bonds to the mercy of stocks for the most part. If the stock markets continue to rise, we may see upward revisions to mortgage rates this afternoon.

The minutes from the last FOMC meeting that were posted late yesterday indicated that the Fed was not too concerned about the credit crisis in the markets at the time of the meeting. They did, however, give a hint of a possible rate cut if conditions continued to worsen. This was taken as favorable news and accordingly, bonds moved a little higher yesterday afternoon.

The first revision to the 2nd Quarter Gross Domestic Product (GDP) will be released early tomorrow morning. Last month's preliminary reading revealed a 3.4% rate of growth, which was slightly above analysts' forecasts. However, a key inflation reading came in below expectations, meaning inflationary pressures were not as strong as expected. A downward revision should help lower mortgage rates tomorrow, especially if the inflation portion of the releases does not get revised higher. However, an upward revision above the current forecast of 4.1% could lead to higher mortgage rates. There will be a final revision issued next month, but it probably will have little impact on mortgage rates.

Also on tap are weekly unemployment claims from the Labor Department, but I am not expecting those numbers to influence bond trading enough to affect mortgage rates.

Thursday's bond market has opened in negative territory again as investors sell holding to capture profits form the recent rally. The stock markets are showing minor losses with the Dow down 2 points and the Nasdaq down 10 points. The bond market is currently down 2/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.

The Labor Department posted weekly unemployment figures this morning, saying that 322,000 new claims for benefits were filed last week. This was close to forecasts and has not had an impact on bond trading or mortgage rates.

The week's most important news will come tomorrow morning when the Commerce Department will post July's Durable Goods Orders. This will give us an important measure of manufacturing sector strength. This data tracks orders at U.S. factories for big-ticket items, or products that are expected to last three or more years. A smaller increase than the expected 1.0% rise would indicate that the manufacturing sector is not as strong as thought. This would be good news for bonds and should lead to lower mortgage rates.

Also scheduled for release tomorrow is July's New Home Sales data. This report is the least important release of the week. It will give us an indication of housing sector strength and mortgage credit demand, but usually doesn't have a major impact on bond prices or mortgage rates. If it indicates that the housing sector is still rapidly weakening, it may help push bond prices higher and mortgage rates slightly lower. But with the Durable Goods report being of much more significance to the markets, it will likely influence mortgage rates much more then the housing report will.

Tuesday's bond market has opened in positive territory again as investors seek safe-haven from stock volatility. The stock markets are showing small gains with the Dow up 25 points and the Nasdaq up 10 points. The bond market is currently up 9/32, which will likely improve this morning's mortgage rates by approximately .250 of a discount point.

There is no relevant economic data scheduled for release today or tomorrow. This will likely leave bonds to be driven by stock markets moves and concerns. If stocks move higher later today and tomorrow, we could see bonds suffer and mortgage rates inch higher. If the major indexes fall, mortgage rates could follow suit. However, I am still holding the lock recommendations for the time being.

There really is no important economic news scheduled for release until Friday morning when the Commerce Department will post July's Durable Goods Orders. This will give us an important measure of manufacturing sector strength. This data tracks orders at U.S. factories for big-ticket items, or products that are expected to last three or more years. A smaller increase than the expected 1.0% rise would indicate that the manufacturing sector is not as strong as thought. This would be good news for bonds and should lead to lower mortgage rates.

Also scheduled for release Friday is July's New Home Sales data. This report is the least important release of the week. It will give us an indication of housing sector strength and mortgage credit demand, but usually doesn't have a major impact on bond prices or mortgage rates. If it indicates that the housing sector is still rapidly weakening, it may help push bond prices higher and mortgage rates slightly lower. But with the Durable Goods report being of much more significance to the markets, it will likely influence mortgage rates much more then the housing report will.

Monday's bond market has opened in positive territory after the stock markets have failed to build on Friday's rally. The major Dow and Nasdaq initially opened with modest gains, but have since fallen into negative territory with losses of 22 points and 5 points respectively. The bond market is currently up 10/32, which will likely improve this morning's mortgage rates by approximately .125 of a discount point.

The Conference Board reported late this morning that its Leading Economic Indicators (LEI) for July rose 0.4%. This indicates that economic activity is expected to increase moderately over the next three to six months, but since it matched forecasts has had little impact on this morning's mortgage rates.

There is no relevant economic data scheduled for release the middle part of the week. I am expecting to see the stock markets be the biggest factor in bond trading those days. If the major stock indexes rally, we may see bond prices fall and mortgage rates rise. However, stock weakness could lead to lower mortgage rates.

Overall, look for Friday to be the busiest day of the week. We may see profit taking in the bond market as investors look to capture the profits from the recent bond rally. This may lead to upward pressure in bonds that could push mortgage rates higher. Accordingly, I am maintaining the current lock recommendations.

This week brings us the release of only three economic reports for the bond market to digest. The Conference Board will give us the first data late tomorrow morning when it releases its Leading Economic Indicators (LEI) for July. This index attempts to measure economic activity over the next three to six months. A higher than expected reading is bad news for the bond market because it indicates that the economy may be strengthening. However, a weaker than expected reading means that the economy may slow in the near future, making stocks less appealing to investors. This also eases inflation concerns in the bond market and could lead to slightly lower mortgage rates tomorrow if the stock markets remain calm.

There is no relevant economic data scheduled for release the middle part of the week. I am expecting to see the stock markets be the biggest factor in bond trading those days. If the major stock indexes rally, we may see bond prices fall and mortgage rates rise. However, stock weakness could lead to lower mortgage rates.

The Commerce Department will post July's Durable Goods Orders Friday morning, giving us an important measure of manufacturing sector strength. This data tracks orders at U.S. factories for big ticket items, or products that are expected to last three or more years. A smaller increase than the expected 1.0% rise would indicate that the manufacturing sector is not as strong as thought. This would be good news for bonds and should lead to lower mortgage rates.

Also scheduled for release Friday is July's New Home Sales data. This report is the least important release of the week. It will give us an indication of housing sector strength and mortgage credit demand, but usually doesn't have a major impact on bond prices or mortgage rates. If it indicates that the housing sector is still rapidly weakening, it may help push bond prices higher and mortgage rates slightly lower. But with the Durable Goods report being of much more significance to the markets, it will likely influence mortgage rates much more then the housing report will.

Overall, look for Friday to be the busiest day of the week. We may see profit taking in the bond market as investors look to capture the profits from the recent bond rally. This may lead to upward pressure in bonds that could push mortgage rates higher. Accordingly, I am maintaining the current lock recommendations.

Friday's bond market has opened flat due to stock strength that is coming as a result of the Fed's rate announcement this morning. The Dow is currently up 164 points while the Nasdaq has gained 40 points. The bond market is currently nearly unchanged, but we will still see an improvement in this morning's mortgage rates of approximately .375 of a discount point.

The only economic news released this morning was the University of Michigan's Index of Consumer Sentiment for this month. It showed a reading of 83.3, which was much lower than the 88.5 that was expected. This indicates that surveyed consumers were less optimistic about their own financial situations than many had thought. That is good news for bonds and mortgage rates.

Today's big Fed news actually isn't much of anything. The Fed announced that they were lowering the Discount Rate .500% to address the market volatility and liquidity concerns. The Discount Rate is not the Federal Funds rate that is the headline rate that the Fed changes during FOMC meetings. That rate change affects many consumer rates such as credit cards, auto loans and home equity lines of credit. The Discount Rate is the rate that the Fed charges banks of overnight loans. It really doesn't affect mortgage rates or consumer oriented rates. Therefore, today's announcement really isn't big news.

Next week is fairly light in terms of economic releases, but we will get one important report later in the week. There is one piece of data scheduled for release Monday with July's Leading Economic Indicators being posted. But look for details on next week's events in Sunday's weekly preview.

Tuesday's bond market opened in negative territory following the release of mixed inflation news, but like yesterday, has since recovered those losses. Also contributing to the rebound in bonds are losses in stocks. The stock markets are reacting negatively with the Dow down 80 points and the Nasdaq down 6 points. The bond market is currently down 2/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.

The Labor Department gave us this morning's big news with the release of July's Producer Price Index (PPI). They reported a 0.6% rise in the overall reading that was much higher than the 0.1% that was expected. The good news came in the core data reading that rose 0.1% when it was expected to increase 0.2%. This means that overall prices rose more than expected at the producer level of the economy. However, if more volatile food and energy prices were excluded, prices rose less than expected. This eases some inflation concerns and helped prevent mortgage rates from spiking higher.

Also posted this morning was June's Goods and Services Trade Balance data. It revealed that the U.S. trade deficit stood at $58.1 billion in June. This was much lower than expected. But, this report usually is not much of an influence on bonds or mortgage rates.

There are two reports scheduled for release tomorrow. The more important of them is July's Consumer Price Index (CPI) at 8:30 AM. The CPI is one of the most important reports we see each month. It measures inflation at the consumer level of the economy. As with today's PPI, there are two readings in the report- the overall index and the core data reading. Current forecasts call for an increase of 0.1% in the overall and 0.2% in the core data reading. Smaller than expected increases should lead to a bond rally and lower mortgage rates. But if we see stronger than expected readings, mortgage pricing will likely move higher tomorrow.

At 9:15 AM tomorrow, Industrial Production data for July will be posted. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is considered to be of fairly high importance and may cause movement in mortgage rates. Analysts are currently expecting to see a 0.3% increase in production. A higher level of output could lead to higher mortgage rates tomorrow, while a weaker than expected figure should help push rates lower, assuming the CPI doesn't reveal any surprises.

This week brings us six pieces of economic data for the bond market to digest. The first is July's Retail Sales report early tomorrow morning. This data is very important to the financial markets and mortgage rates because it helps us measure consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, any data related to it can cause a fair amount of movement in the markets. A smaller than expected increase would indicate that consumers are spending less than previously thought, potentially slowing the economy. This is good news for the bond market and mortgage rates as it eases inflation concerns and makes long-term securities such as mortgage-related bonds more attractive to investors. Current forecasts are calling for an increase of 0.2%.

The next report is scheduled for release early Tuesday morning with the release of July's Producer Price Index (PPI). This index is considered to be an indicator of inflation at the producer level of the economy. There are two readings in the report- the overall index and the core data reading. The core data is more important because it excludes more volatile food and energy prices that can change significantly from month to month. Current forecasts call for an increase of 0.1% in the overall and 0.2% in the core data reading. A larger increase may raise inflation concerns and push mortgage rates higher Tuesday morning. If it reveals a smaller than expected increase, we could see mortgage rates improve as a result.

There are two reports due to be posted Wednesday. The most important of the three is July's Consumer Price Index (CPI) at 8:30 AM. The CPI is one of the most important reports we see each month. It measures inflation at the consumer level of the economy. As with Tuesday's PPI, there are two readings in the report- the overall index and the core data reading. Current forecasts call for an increase of 0.2% in the overall and 0.2% in the core data reading. Smaller than expected increases should lead to a bond rally and lower mortgage rates. However, stronger than expected readings will likely cause a spike in mortgage pricing.

At 9:15 AM Wednesday, Industrial Production data for July will be posted. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is considered to be of fairly high importance and may cause movement in mortgage rates. Analysts are currently expecting to see a 0.3% increase in production. A higher level of output could lead to higher mortgage rates Wednesday, while a weaker than expected figure should help push rates lower, assuming the CPI doesn't reveal any surprises.

Thursday's only monthly data is July's Housing Starts data. This report gives us an indication of housing sector strength and mortgage credit demand. However, it isn't considered to be of high importance to the bond market or mortgage pricing and usually doesn't cause much movement in mortgage rates unless it varies greatly from forecasts. This report is the least important of the week's reports.

Friday morning, the University of Michigan will release its Index of Consumer Sentiment for August at 9:45 AM. This index gives us a measurement of consumer willingness to spend. If confidence is rising, then consumers are more apt to make large purchases. This helps fuel consumer spending and economic growth. A drop in confidence will probably boost bond prices, leading to lower mortgage rates. If the index rises, indicating that confidence is rising and spending is likely to continue, we may see mortgage rates move higher Friday.

Overall, look for the most movement in bond prices and mortgage rates the first part of the week. Monday, Tuesday or Wednesday may turn out to be the most important. I still feel there is a possibility of the bond market moving lower than much higher (pushing yields and mortgage pricing higher). This makes it prudent to consider locking an interest rate if closing in the immediate future. If we get stronger than expected results in the PPI and CPI releases, I fear that we may see mortgage rates spike higher fairly quickly. If those reports do further ease inflation concerns, I will likely be shifting to a float recommendation. But, the risk versus reward comparison still heavily favors the risk side in my opinion, therefore, I am holding the lock recommendations for the time being.

Thursday's bond market has opened strong following yesterday's sell-off. Stocks rallied late yesterday, helping to push bond prices lower during afternoon trading. However, stocks have opened weak this morning and bonds are benefiting by recovering a good portion of yesterday's losses. The Dow is currently down 148 points and the Nasdaq has lost 23 points. The bond market is currently up 18/32, but due to yesterday's late selling, we will likely see a slight increase in this morning's rates compared to yesterday's morning pricing.

What actually started the selling in bonds late yesterday were the results of the 10-year Note sale. Investor interest was considered weak, causing other holders to sell. As bond prices dropped, funds were shifted into stocks. That continued most of the afternoon and led to afternoon revisions to mortgage rates.

The good news is that bonds are being bought back today. The potential bad news is that there is another Treasury auction today. 30-year Bonds are being sold today with those results being posted at 1:00 PM. I don't expect these results to impact bonds as much as yesterdays' did, but we could see selling pick up if it is also met with a lackluster demand. Accordingly, I would be cautious towards rates into afternoon trading.

The Labor Department posted weekly unemployment claims numbers this morning, saying that 316,000 new claims were filed last week. This was higher than expected, but didn't really influence bond trading or mortgage rates this morning.

There is no relevant news or data scheduled for release tomorrow. This will leave bonds to fluctuations in the stock markets. If stocks rise, expect to see bond prices move lower and mortgage rates move higher. If stocks continue to weaken, mortgage rates may improve tomorrow.

Wednesday's bond market has opened in negative territory following early stock market gains. The stock markets are continuing yesterday's late rally with the Dow up 69 points and the Nasdaq up 38 points. The bond market is currently down 15/32, which will likely push this morning's mortgage rates by approximately .125 to .250 of a discount point.

There is no relevant economic news scheduled for release today. This will leave the bond market subject to stock market swings. If the major stock indexes continue to rise, bonds will likely suffer and mortgage rates will rise. If stocks move into negative territory, we could see improvements to mortgage pricing.

Today does brings us the first of two Treasury auctions that may influence bond trading and possibly mortgage rates. The 10-year Note sale is being held today while 30-year Bonds will be sold tomorrow. If the sales are met with a lackluster interest from investors- particularly international buyers, the bond market may move lower after the results are posted. The end results will be announced at 1:00 PM each day. If there will be revisions to mortgage rates because of the results, look for them to be made during afternoon trading.

The Labor Department will post weekly unemployment claims numbers tomorrow morning. They are expected to show 310,000 new claims were filed last week. A higher number of claims would be good news for bonds, but this data usually does not influence bond trading or mortgage rates much because it covers only a week's worth of claims.

Tuesday's bond market has opened flat despite the release of unfavorable economic news. The stock markets are also flat as investors await for today's FOMC comments. The Dow is currently down 10 points while the Nasdaq has slipped 2 points. The bond market is currently up 1/32, which will likely keep this morning's mortgage rates nearly unchanged from yesterday's rates.

The Labor Department posted today's only economic news with the release of 2nd Quarter Employee Productivity and Costs data. It showed an increase of 1.8%, which was weaker than the 2.0% level that was forecasted. Normally, weaker than expected results are considered good news for the bond market and mortgage rates. However, strong readings in this data are what traders want to see. This was still a sizable increase, but since it was lower than expected and a few hours ahead of the FOMC adjournment, its results had little impact on the markets or mortgage rates.

Today's FOMC meeting will adjourn at 2:15 PM. It is expected to yield no change to key interest rates. Usually, the post-meeting comments seem to have more of an influence on the markets than the rate adjustments themselves as the rate changes, or a lack of one, are quite often already expected. I do expect to see a fair amount of volatility in the markets after the statement is released.

Monday's bond market has opened in negative territory following stock gains. The stock markets are showing sizable gains with the Dow up 75 points and the Nasdaq up 8 points. The bond market is currently down 3/32, but we will likely still see a slight improvement in mortgage rates as a result of strength late Friday.

This week brings us the release of only one piece of economic data, which comes tomorrow morning. Employee Productivity and Costs data for the second quarter will give us an indication of employee output. High levels of productivity are believed to allow the economy to grow without fears of inflation. I don't see this being a big mover of mortgage pricing, especially since it is the same day as the FOMC meeting. Analysts are currently expecting to see an increase in productivity of 2.0%. A higher than expected reading could help improve bonds, but until we get the results of the FOMC meeting, we will likely see little movement in mortgage rates.

However, the biggest event of the week will be the Federal Open Market Committee (FOMC) meeting tomorrow afternoon. The FOMC meeting will adjourn at 2:15 PM. It is expected to yield no change to key interest rates. Usually, the post-meeting comments seem to have more of an influence on the markets than the rate adjustments themselves as the rate changes, or a lack of one, are quite often already expected.

Bond traders will be watching the post meeting statement very carefully. Generally speaking, a hint of more rate hikes in the future will be construed as an indication that inflation is still a concern and would likely lead to bond selling and increases to mortgage rates. If the statement gives an indication that the Fed is not as concerned with inflation as previously noted, the bond market should rally, leading to lower mortgage rates.

Overall, I am expecting to see a choppy week in trading and mortgage rates. We will likely see the most movement in rates tomorrow with the only important data of the week and the FOMC meeting. Wednesday's Treasury auction may also affect rates during afternoon trading. I suspect that the rest of the week will be driven by stock market gains or losses. If the major stock indexes continue their downward trend, bonds should benefit as investors seek safe haven from the volatility. But, if stocks rally, those safe-haven funds that we have seen over the past few weeks could move back into stocks. This would drive bond prices lower and mortgage rates higher. Accordingly, I am holding the lock recommendations for the time being.

Friday's bond market has opened in positive territory following the release of favorable employment data. The stock markets are reacting negatively to the news with the Dow down 42 points and the Nasdaq down 12 points. The bond market is currently up 11/32, which will likely improve this morning's mortgage rates by approximately .250 of a discount point.

The Labor Department gave us this morning's data, saying that the unemployment rate rose to 4.6% last month and that only 92,000 new jobs were added to the economy. They also reported that the average hourly earnings rose 0.3%. The unemployment rate was higher than expected and the payrolls number was well below forecasts, leading to this morning's bond rally. The average earnings reading matched forecasts and hasn't influenced bond trading this morning.

This morning's data indicates that the employment sector was not as strong as thought. This is very good news for the bond market and mortgage rates. However, the recent sizable rally in bonds leads me to fear about profit taking by traders that could lead to an upward move in bond yields and mortgage rates. I would like to see some stability in bonds before I can comfortably say that rates are still headed lower. Without that, I am likely to hold the lock recommendations for at least the immediate and short-term periods.

Next week brings us the release of little economic news for the markets to digest. We do however, have another FOMC meeting on the calendar. Look for more details on next week's events in Sunday's weekly preview.

Thursday's bond market has opened relative flat again despite the release of weaker than expected economic news. The stock markets are showing gains with the Dow up 50 points and the Nasdaq up 14 points. The bond market is currently up 1/32, which could give us a small improvement in this morning's mortgage rates.

The Commerce Department posted June's Factory Orders data late this morning, revealing a 0.6% rise. This was weaker than expected and helped boost bond prices slightly that were sagging as a result of stock strength.

The Labor Department said early this morning that 307,000 new claims for unemployment benefits were filed last week. This was a little softer than expected, but an increase from the previous week. However, this data is not considered to be of high importance to the markets, especially with monthly figures coming tomorrow.

The Employment report will be released early tomorrow morning, giving us the U.S. unemployment rate, number of new jobs added to the economy and the average hourly earnings reading. The ideal situation for the bond market is rising unemployment, a loss of new jobs and little increase in earnings. This report is considered to be one of the single most important releases that we see each month.

Tomorrow's report is expected to show that the unemployment rate stood at 4.5% last month while approximately 135,000 new jobs were added and a 0.3% increase in average earnings. The unemployment rate probably will not be much of a factor if the new jobs number varies from forecasts. However, due to the importance of the payroll numbers, we will undoubtedly see quite a bit of volatility in the markets and mortgage pricing.

Wednesday's bond market has opened relative flat despite the release of a weaker than expected manufacturer sentiment report. The stock markets are mixed with the Dow up 11 points and the Nasdaq down 11 points. The bond market is currently down 1/32, but we will likely see a small improvement in mortgage pricing as a result of strength in bonds late yesterday.

The Institute for Supply Management (ISM) said this morning that their manufacturing index for July fell to 53.8. This was lower than forecasts and indicates that manufacturers were less optimistic about business during the month than analysts had thought. That is good news for bonds and mortgage rates because it is believed to hint at slowing manufacturing activity.

June's Factory Orders data will be posted late tomorrow morning. This report helps us measure manufacturing sector strength by tracking orders for both durable and non-durable goods during the month of June. It is similar to last week's Durable Goods Orders report that tracks only orders for big-ticket items. Since a significant portion of the data was released last week, this report may not have a significant impact on the markets. Analysts' are expecting to see an increase of approximately 1.0% in new orders.

The most important piece of data this week and arguably the most important each month is the Employment report. This report gives us the U.S. unemployment rate, number of new jobs added to the economy and the average hourly earnings reading. The ideal situation for the bond market is rising unemployment, a loss of new jobs and little increase in earnings. This report is considered to be one of the single most important releases that we see each month.

Friday's report is expected to show that the unemployment rate stood at 4.5% last month while approximately 135,000 new jobs were added and a 0.3% increase in average earnings. The unemployment rate probably will not be much of a factor if the new jobs number varies from forecasts. However, due to the importance of the payroll numbers, we will undoubtedly see quite a bit of volatility in the markets and mortgage pricing.