Thursday's bond market has opened down slightly following a stock market rebound. The Dow is currently up 59 points while the Nasdaq has gained 10 points. The bond market is currently down 6/32, but we will likely still see an improvement in this morning's mortgage rates of approximately .250 of a discount point due to strength in bonds late yesterday.

Today's only important news was the revised 2nd Quarter Productivity numbers that showed productivity actually rose at 2.4% annual rate in the second quarter. This was a sizable upward revision from the original reading and stronger than analysts had expected. That is good news for bonds and mortgage rates, but seems to be ignored in today's trading.

Yesterday afternoon's release of the Fed Beige Book did give some insight to the effect that the credit crisis has had on the economy. According to the report, its impact has been limited to the housing sector for the most part. There was concern that it could spread to other parts of the economy, slowing economic activity. While this is good news for the average consumer, it wasn't considered to be favorable to bonds and mortgage rates. The fear of the crisis slowing activity led many analysts to think the Fed may cut key short-term interest rates at its next meeting. The limited impact has some rethinking their position.

The big news of the week is tomorrows Employment report. The Labor Department will post the unemployment rate, number of new jobs added or lost and average hourly earnings for August early tomorrow morning. The ideal scenario for the bond market and mortgage rates is rising unemployment, a smaller than expected rise in new payrolls and earnings to remain unchanged. Analysts are expecting to see the unemployment rate remain at 4.6% and 110,000 new jobs added. Weaker then expected readings would be very good news for bonds and mortgage rates.

Friday's bond market has opened in positive territory despite stronger than expected economic news. The stock markets have fallen into negative territory with the Dow down 28 points and the Nasdaq down 7 points. The bond market is currently up 7/32, which with yesterday's late rally should improve this morning's mortgage rates by approximately .250 - .375 of a discount point.

The first of today's two reports was August's Personal Income and Outlays data. It showed that personal income rose 0.4%, as expected. The negative news came from the outlays portion of the report that revealed a 0.6% rise in personal spending. This is important because consumer spending makes up two thirds of the U.S. economy. Strong levels of spending leads to inflation concerns and usually hurts bonds prices and cause mortgage rates to move higher. Fortunately, the market has taken the news in stride and continues the upbeat momentum from yesterday.

The second report of the day was the University of Michigan's Consumer Sentiment Index for September. This index measures consumer confidence and showed a reading of 83.4. This was lower than the 84.0 reading that was forecasted, which can be considered good news for bonds and mortgage rates. The weaker than expected level of confidence is thought to mean that consumers are less likely to make large purchases in the immediate future. This could help limit economic activity and ease inflation concerns.

Next week brings us the release of only a couple of pieces of economic news, but all of them can be considered to be important to the markets. They begin Monday with the release of the ISM manufacturing index Monday morning and conclude with the almighty Employment report Friday morning. In between, the schedule is light. But look for more details on next week's events in Sunday's weekly preview.

Wednesday's bond market has opened in negative territory despite weaker than expected economic news. The stock markets are posting sizable gains with the Dow up 80 points and the Nasdaq up 22 points. The bond market is currently down 9/32, which should push this morning's mortgage rates higher by approximately .250 of a discount point.

The Commerce Department said that new orders for big-ticket items fell 4.9% last month. This was a larger drop than was expected, but this data can be quite volatile due to aircraft and transportation related orders. Still, the news is somewhat favorable to bonds and mortgage rates, but today's stock gains have prevented much interest in bonds.

There are two pieces of relevant economic news scheduled for release tomorrow. The first is the final revision to the 2nd Quarter Gross Domestic Product (GDP). Since this data is aged now and the preliminary reading of the 3rd Quarter GDP will be released next month, I don't see this revision having much of an impact on the financial markets or mortgage pricing. It is expected to show a slight decline from the previous estimate of a 4.0% annual rate.

The second is the release of August's New Home Sales. It is expected to show that sales of new homes fell in August. As was the case with Tuesday's Existing Home Sales data, this report will likely not have a significant impact on mortgage rates.

The Labor Department will also give last week's unemployment claim numbers, which are expected to come in at 320,000 new claims. Unless this figure varies greatly from forecasts, it will likely have little impact on tomorrow's mortgage pricing.

Thursday's bond market has opened well in negative territory despite weaker than expected economic news. The stock markets are down slightly with the Dow down 12 points and the Nasdaq down 4 points. The bond market is currently down 18/32, which will likely push this morning's mortgage rates higher by approximately .250 - .375 of a discount point.

The Conference Board reported a much weaker than expected reading in its Leading Economic Indicators (LEI) for August. They said that the index fell 0.6%, indicating that economic activity may slow relatively quickly during the next three to six months. This is good news for the bond market and mortgage rates. However, tempering its impact on bonds today was a 0.3% upward revision to July's reading. But even with the large drop, bonds have not been able to get into buying mode.

The Labor Department said that 311,000 new claims for unemployment benefits were filed last week. This was lower than the 320,000 claims that were expected, but this data is not important enough to cause this morning's selling in bonds.

This morning's selling appears to be a result of less optimism about where bonds are headed in the near future. This has traders selling holdings to post profits from the recent run, which does not come as a complete surprise and has been the basis for my recent lock recommendations. I believe that we may be nearing a level that makes the risk worth floating an interest rate, but I am not quite prepared to shift to a float recommendation yet.

There is no relevant economic data scheduled for release tomorrow. Look for the stock markets to be a major influence on bond trading, and therefore, mortgage pricing.

Tuesday's bond market has opened in negative territory following the release of this morning's inflation data. The stock markets are posting early gains with the Dow up 70 points and the Nasdaq up 8 points. The bond market is currently down 7/32, but I am not expecting to see much of a change in this morning's mortgage rates as lenders wait for the results of today's FOMC meeting before making significant changes.

The Labor Department reported that August's Producer Price Index (PPI) fell a whopping 1.2% when it was expected to drop 0.3%. However, the core data reading rose 0.2%, exceeding forecasts of a 0.1% increase. This means that the more stable and therefore more important core data showed slightly higher levels of inflationary pressures than analysts had expected. This is considered bad news for bonds because inflation erodes the value of a bond's future fixed interest payments.

Today's FOMC meeting will adjourn at 2:15 PM ET. The general consensus is that the Fed will cut rates for the first time since June 2003. There is also debate about how much of a rate cut is coming. Many analysts are calling for a half-point decline at this meeting or a quarter point cut at the next two meetings. I am not so sure the Fed will lower the Fed Funds rate at this meeting. My estimates are only 30% chance of it happening at this meeting and only little possibility of a half point cut. But, Mr. Bernanke and friends have little interest in our thoughts. I suspect that if they leave rates unchanged, the financial markets will be disappointed and will tank. A quarter point move will also be somewhat of a disappointment and could lead to weakness in stocks.

The wildcard is that regardless of how the markets react to the Fed move and its post-meeting statement. If we see significant weakness in stocks, the bond market may benefit as a safe-haven from the volatility. This could lead to lower mortgage rates. However, that is much too speculative to bet that way with mortgage rates. There just is no way to predict am emotional response in the markets. Accordingly, I strongly recommend proceeding carefully regarding mortgage rates the next few days.

Look for an update here shortly after the markets have had an opportunity to react to the meeting's results and statement.

Monday's bond market has opened in negative territory as the markets await tomorrow's events. The stock markets are showing losses also with the Dow down 65 points and the Nasdaq down 20 points. The bond market is currently down 3/32, which with Friday's late weakness, will push this morning's mortgage rates higher by approximately .250 of a discount point over Friday's morning rates.

There is no relevant news scheduled for release today. The first important piece of data comes tomorrow morning with the release of August's Producer Price Index (PPI). This report will give us a very important measurement of inflationary pressures at the producer level of the economy. There are two readings that analysts follow in this release. They are the overall index and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. Analysts are currently calling for a 0.3% decline in the overall index, and a rise of 0.1% in the core data. Stronger than expected readings could fuel inflation concerns in the bond market and lead to an increase in mortgage rates tomorrow morning.

The FOMC meeting will adjourn at 2:15 PM tomorrow. There is significant debate about a possible change to key short-term interest rates at this meeting. The general consensus is that the Fed will cut rates for the first time since June 2003. There is also debate about how much of a rate cut is coming. Many analysts are calling for a half-point decline at this meeting or a quarter point cut at the next two meetings. I am not so sure the Fed will lower the Fed Funds rate at this meeting. My estimates are only 30% chance of it happening at this meeting and only little possibility of a half point cut. But, Mr. Bernanke and friends have little interest in our thoughts. I suspect that if they leave rates unchanged, the financial markets will be disappointed and will tank. A quarter point move will also be somewhat of a disappointment and could lead to weakness in stocks.

The wildcard is that regardless of how the markets react to the Fed move and its post-meeting statement, if we see significant weakness in stocks, the bond market may benefit as a safe-haven from the volatility. This could lead to lower mortgage rates. However, that is much too speculative to bet that way with mortgage rates. There just is no way to predict am emotional response in the markets. Accordingly, I strongly recommend proceeding carefully regarding mortgage rates the next few days.

Overall, I expected to see some pressure in bonds today as investors prepare for tomorrow's data and FOMC meeting. I am not in total agreement with what many analysts and market participants are predicting will happen tomrorow, therefore, I am holding the lock recommendations for the time being. Please proceed cautiously is still floating an interest rate. This will likely be one of those key weeks in the mortgage market.

Friday's bond market opened in positive territory but has since slipped into negative ground. The stock markets are currently showing losses with the Dow down 18 points and the Nasdaq down 6 points. The bond market is currently down 3/32, but we will likely see a slight improvement in this morning's mortgage rates. However, there is a possibility of seeing that small improvement erased by an upward revision to rates if your lender has already posted this morning's pricing.

Today's big news was August's Retail Sales report. It showed that sales rose 0.3% last month, which was lower than 0.5% that was expected. The conflicting news was that July's sales were revised higher by 0.2%, somewhat offsetting August's disappointing number. If transportation related sales that are quite volatile from month to month are excluded, sales would have fallen 0.4% last month. This was much lower than forecasts and led to the early rise in bonds. Unfortunately, the market could not hold on to those gains.

The second report of the day was August's Industrial Production report that showed a slightly weaker than expected increase of 0.2% in factory output. But, as with the sales data, July's reading was also revised higher, muting August's miss.

The University of Michigan's Index of Consumer Sentiment was the third and final piece of data posted this morning. It showed a reading of 83.8, which was higher than expected and could be considered negative news for bonds. But, the difference between forecasts and the actually reading was not enough to cause much concern in the markets.

Next week does not bring us a large number of economic reports, but we will get two key inflation releases in the Producer and Consumer Price Indexes. Also next week is the much anticipated FOMC meeting. There are no relevant economic events on tap for Monday, meaning the fun will begin Tuesday. Look for details on next week's events in Sunday's weekly preview.

Thursday's bond market has opened well in negative territory due to sizable stock market gains and today's Treasury auction. The stock markets are currently rallying with the Dow up 140 points and the Nasdaq up 11 points. The bond market is currently down 15/32, which will likely push this morning's mortgage rates higher by approximately .250 - .375 of a discount point.

The Labor Department reported this morning that 319,000 new claims for benefits were filed last week. This was an increase from the previous week, but smaller than what analysts had expected. However, this data is not considered to be of high importance and has not had much influence on today's trading or mortgage pricing.

Some of today's weakness in bonds can be attributed to today's 10-year Treasury Note auction. It is fairly common to see some weakness in bonds before these sales as investors prepare for them. But, if the sales are met with a decent demand from investors, those losses are normally recovered after the results are announced. The results will be posted at 1:00 pm ET this afternoon. If demand was strong, particularly from international investors, we should see mortgage rates improve during afternoon trading.

Tomorrow brings us the release of three pieces of relevant data. The first is the release of August's Retail Sales report. It will give us a measurement of consumer spending, which is very important to the markets because consumer spending makes up two-thirds of the U.S. economy. Current forecasts are calling for a 0.5% increase in sales last month after July's 0.3% rise. If we see a higher level of spending than is forecasted, the bond markets will most likely fall and mortgage rates will rise. However, a weaker than expected reading could push bond prices higher and mortgage rates lower tomorrow.

The second report of the day is August's Industrial Production report. 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 moderately important but could 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, while a weaker than expected figure should help push rates lower.

The last report of the week comes from the University of Michigan. Their consumer sentiment index will give us an indication of consumer confidence, which hints at consumers' willingness to spend. If confidence is rising, consumers are more apt to make large purchases. But, if they are growing more concerned of their personal financial situations, they probably will delay making that large purchase. This influences future consumer spending data and can impact the financial markets. It is expected to show a reading of 83.5.

Wedesday's bond market has opened in negative territory again with no relevant economic news on tap and the stock markets showing small gains. The Dow is currently up 20 points and the Nasdaq up 9 points. The bond market is currently down 6/32, which will likely push this morning's mortgage rates higher by approximately .125 - .250 of a discount point.

There is no relevant data scheduled for release today or tomorrow. The Labor Department will release weekly unemployment claim stats early tomorrow morning, but this data usually is not much of an influence on bond trading or mortgage rates unless it varies greatly from forecasts. Tomorrow's report is expected to show that new claims for unemployment benefits rose to 325,000 last week. However, unless they reveal a much higher or much lower number, I am expecting the bond market to react more to stock movements than this data.

There is a 10-year Treasury Note auction tomorrow. It is fairly common to see some weakness in bonds before these sales as investors prepare for them. But, if the sales are met with a decent demand from investors, those losses are normally recovered after the results are announced. The results will be posted at 1:00 pm ET tomorrow. If demand was strong, particularly from international investors, we should see mortgage rates improve during afternoon trading.

Due partly to a lack of data today and tomorrow and a suspicion that we will see stock prices rise further, I am holding the lock recommendation for immediate and short-term periods. As a reminder, this does not necessarily mean that I think rates will move higher during those time frames. It simply means that the risk versus reward of continuing to float has shifted more towards the risk side.

Friday brings us the release of three pieces of news that could affect mortgage rates, including one very important release. Look for plenty of movement in bonds and mortgage rates Friday.

Tuesday's bond market has opened in negative territory following early stock market gains. The stock markets are currently rallying with the Dow up 135 points and the Nasdaq up 25 points. The bond market is currently down 5/32, but I don't believe we will see much of a chance in this morning's mortgage rates.

Today's only data was July's Goods and Services Trade Balance report that showed the U.S. trade deficit stood at $59.2 billion. This was very close to forecasts and due to the lack of attention this data gets directly by bond traders, it has not had an effect on this morning's trading.

There is no relevant data scheduled for release tomorrow or Thursday. Friday brings us the release of three pieces of news that could affect mortgage rates. In the meantime, there is a 10-year Treasury Note auction Thursday. It is fairly common to see some weakness in bonds before these sales as investors prepare for them. But, if the sales are met with a decent demand from investors, those losses are normally recovered after the results are announced. The results will be posted at 1:00 pm ET Thursday. If demand was strong, particularly from international investors, we should see mortgage rates improve Thursday afternoon.

Due partly to a lack of data the next two days and a suspicion that we will see stock prices rise those days, I have shifted back to a lock recommendation for immediate and short-term periods. As a reminder, this does not necessarily mean that I think rates will move higher during those time frames. It simply means that the risk versus reward of continuing to float has shifted more towards the risk side.

Monday's bond market has opened in positive territory as the momentum from Friday carries into today's trading. The stock markets are currently showing losses with the Dow down 60 points and the Nasdaq down 15 points. The bond market is currently up 15/32, which will likely improve this morning's mortgage rates by approximately .125 - .250 of a discount point over Friday's rates.

The first report of the week comes tomorrow morning, but is not considered to be of high importance. July's Goods and Services Trade Balance data will be posted early tomorrow morning, giving us the size of the U.S. trade deficit. It is expected to show a deficit of approximately $59.0 billion, which would be an increase from June's $58.1 billion. However, I would consider this the least important of this week's releases, meaning it will likely have little impact on bond trading or mortgage rates.

There is no relevant data scheduled for release Wednesday or Thursday. But, there is a 10-year Treasury Note auction Thursday. It is fairly common to see some weakness in bonds before these sales as investors prepare for them. But, if the sales are met with a decent demand from investors, those losses are normally recovered after the results are announced. The results will be posted at 1:00 pm ET Thursday. If demand was strong, particularly from international investors, we should see mortgage rates improve Thursday afternoon.

Overall, this will likely be a pretty active week for the bond market and mortgage rates. Friday's Retail Sales report is the week's single most important. If we see weaker than expected readings in that data, we should see mortgage rates move lower for the week. However, a stronger than expected reading would likely drive bond prices lower and mortgage rates higher. I am holding the float recommendations for now, but could change if there is a lackluster interest in the 10-year auction or if the sales report shows stronger than expected results. We may also see the stock markets significantly influence bond trading, so look for sizable movement in the major indexes to also lead to a possible change in recommendations

Friday's bond market has opened sharply higher following quite favorable results from August's Employment report. The stock markets are not reacting well to the news with the Dow down 193 points and the Nasdaq down 45 points. The bond market is currently up 27/32, which should improve this morning's mortgage rates by approximately .375 of a discount point.

The Labor Department reported this morning that the unemployment rate remained at 4.6% last month and that average earnings rose 0.3%, both as expected. The shock came in the number of new payrolls during the month. What was expected to be 110,000 new jobs turned out to be a decline of 4,000 jobs. In addition, June and July's payroll numbers were revised significantly lower. This gives a strong indication of a possible economic slowdown, which is very good news for the bond market and mortgage rates.

Today's news has led to further speculation that the Fed will cut key short-term interest rates at their next FOMC meeting on September 18th. There was somewhat of a division amongst analysts before today's data on whether the rate cut would come at this next meeting or later in the year. The only debate by most of them now is whether we will see a quarter or half-point cut this month. I suspect we will see plenty of speculation and volatility in the markets as we get closer to the date.

Next week brings us the release of a couple of important pieces of data to watch. However, all of them are scheduled for release Friday morning. This will leave the bond market to be influenced by stock market fluctuations the first part of the week. I suspect that we will see continued weakness in stocks as investors now become more concerned about next quarter's earning results. This could lead to further gains in bonds as investors seek safe-haven from the volatility. But, if stocks rebound, we may see bonds move higher quickly, so be prepared to react.

Wednesday's bond market has opened in well in positive territory with stocks showing sharp losses. The stock markets are in selling mode with the Dow down 170 points and the Nasdaq down 20 points. The bond market is currently up 12/32, which will likely improve this morning's mortgage rates higher by approximately .250 of a discount point.

There is no relevant economic news scheduled for release this morning. However, the Federal Reserve will release its Beige Book report at 2:00 PM ET. This report details current economic conditions in the U.S. by region. It is believed to be a key source of data when the Fed meets for their FOMC meetings. If it reveals any significant surprises, we may see movement in the markets and mortgage pricing as analysts adjust their theories on the Fed's next interest rate move. Most likely though, it will be a non-event and will not lead to a change in mortgage rates.

Tomorrow morning brings us the revision to the 2nd Quarter Productivity numbers, which measures employee productivity in the workplace. It is expected to show an upward change from the previous estimate of a 1.8% annual pace. Forecasts are currently calling for a reading of 2.3%, which would be good news for the bond market and possibly lead to slightly lower mortgage rates tomorrow.

The big news of the week comes Friday morning. The Labor Department will post the unemployment rate, number of new jobs added or lost and average hourly earnings for August early Friday. The ideal scenario for the bond market and mortgage rates is rising unemployment, a smaller than expected rise in new payrolls and earnings to remain unchanged. Analysts are expecting to see the unemployment rate remain at 4.6% and 110,000 new jobs added. Weaker then expected readings would be very good news for bonds and mortgage rates.

Tuesday's bond market has opened in negative territory following early stock gains. The stock markets are showing gains with the Dow up 41 points and the Nasdaq up 25 points. The bond market is currently down 8/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.

The Institute for Supply Management (ISM) posted their manufacturing index for August late this morning, showing a reading of 52.9. This indicates that there was a decline in manufacturer sentiment, but was very close to forecasts and therefore has not had much of an impact on this morning's trading or mortgage pricing.

There is no relevant economic news scheduled for release tomorrow morning. However, the Federal Reserve will release its Beige Book report during afternoon trading tomorrow. This report details current economic conditions in the U.S. by region. It is believed to be a key source of data when the Fed meets for their FOMC meetings. If the 2:00 PM ET release reveals any significant surprises, we may see movement in the markets and mortgage pricing as analysts adjust their theories on the Fed's next interest rate move. Most likely though, it will be a non-event and will not lead to a change in mortgage rates.

Thursday morning brings us the revision to the 2nd Quarter Productivity numbers, which measures employee productivity in the workplace. It is expected to show an upward change from the previous estimate of a 1.8% annual pace. Forecasts are currently calling for a reading of 2.3%, which would be good news for the bond market and possibly lead to slightly lower mortgage rates Thursday morning.

The big news of the week comes Friday morning. The Labor Department will post the unemployment rate, number of new jobs added or lost and average hourly earnings for August early Friday. The ideal scenario for the bond market and mortgage rates is rising unemployment, a smaller than expected rise in new payrolls and earnings to remain unchanged. Analysts are expecting to see the unemployment rate remain at 4.6% and 110,000 new jobs added. Weaker then expected readings would be very good news for bonds and mortgage rates.

There are only four relevant economic reports scheduled for release this week. However, two are considered to be of high importance and they come in a holiday-shortened trading week. The financial markets are closed tomorrow due to the Labor Day holiday and will reopen Tuesday morning, leaving four business days this week.

The first piece of data this week comes Tuesday morning with the release of the Institute for Supply Management's (ISM) manufacturing index at 10:00 AM ET. This index measures manufacturer sentiment and is expected to show a decline from last month's reading of 53.8 to 53.0 in August. A reading above 50 means that more surveyed manufacturers felt business improved during the month than those who felt it worsened. An increase in the index would probably cause a rally in the stock markets and lead to mortgage rates rising Tuesday, while a reading below 53.0 should lead to lower rates.

The second report comes Wednesday afternoon when the Federal Reserve will release its Beige Book report. This report details current economic conditions in the U.S. by region. It is believed to be a key source of data when the Fed meets for their FOMC meetings. It is usually released approximately two weeks prior to each FOMC meeting. If the 2:00 PM ET release reveals any significant surprises, we may see movement in the markets and mortgage pricing as analysts adjust their theories on the Fed's next interest rate move. Most likely though, it will be a non-event and will not lead to a change in mortgage rates.

Thursday morning brings us the revision to the 2nd Quarter Productivity numbers, which measures employee productivity in the workplace. It is expected to show an upward change from the previous estimate of a 1.8% annual pace. Forecasts are currently calling for a reading of 2.3%, which would be good news for the bond market and possibly lead to slightly lower mortgage rates Thursday morning.

The big news of the week comes Friday morning. The Labor Department will post the unemployment rate, number of new jobs added or lost and average hourly earnings for August early Friday. The ideal scenario for the bond market and mortgage rates is rising unemployment, a smaller than expected rise in new payrolls and earnings to remain unchanged. If we are that fortunate, I expect to see mortgage rates drop considerably Friday morning. Analysts are expecting to see the unemployment rate remain at 4.6% and 120,000 new jobs added. Weaker then expected readings would be very good news for bonds and mortgage rates.

Overall, I expect to see the most movement in rates Friday, but Tuesday should also be fairly active. With the bond market still near recent highs, I am holding the lock recommendations for the time being as there still seems to be plenty of profit taking opportunities for traders if they choose to do so. This could lead to a spike in mortgage rates if traders sell holdings to capture those gains. This does not mean that I think rates will necessarily move higher. It means that I feel the risk versus the potential reward of continuing to float an interest rate is leaning heavily towards the risky side. Accordingly, locking seems to be the prudent position at this time.