Wednesday's bond market has opened in negative territory as traders continue to digest yesterday's events. Also contributing to this morning's weakness was news of a much larger than expected quarterly loss and mortgage giant Freddie Mac. This raised concerns about the credit markets and the stability of the company and its sister entity Fannie Mae. The concern led to more selling in bonds in this morning and sizable increases to mortgage rates.

The stock markets are mixed with the Dow up 40 points and the Nasdaq up 28 points. The bond market is currently down 25/32.

There is no relevant economic news scheduled for release today. Yesterday's FOMC meeting has adjourned with an announcement that there was not a change to key short-term interest rates. It was the second consecutive meeting with no change and was widely expected. The post-meeting statement indicated that the Fed was aware and considered the economic slowdown but also was quite concerned about the threat of inflation. Those words created concern in the bond market since inflation erodes the value of a bond's future fixed interest payments.

The next piece of news is tomorrow's posting of weekly unemployment figures and those are not considered to be of high importance to the markets. This leaves the bond market to be influenced by stock and oil prices. If stocks continue to move higher, we may see bonds suffer and mortgage rates move higher until Friday's data is posted. If the major indexes begin to fall, bond could benefit and drive mortgage rates lower.

Employee Productivity and Costs data for the second quarter will be released Friday morning. It 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, but since it is the only data of the day it may influence rates slightly. Analysts are currently expecting to see an increase in productivity of 2.7%. A higher than expected reading could help improve bonds, leading to lower mortgage rates.

Friday's bond market has opened in negative territory despite sizable stock losses. The stock markets in selling mode with the Dow down 145 points and the Nasdaq down 40 points. The bond market is currently down 3/32, which will likely keep this morning's mortgage rates at yesterday's levels.

July's Personal Income and Outlays was the first piece of economic data posted this morning. It showed that spending rose 0.2% as it was expected to, but a surprising drop of 0.7% in income was the largest decline in three years. This indicates that consumers have less income to spend than thought, which will likely translate into slower consumer spending. That is considered good news for bonds and mortgage rates.

August's revision to the University of Michigan's Index of Consumer Sentiment was also posted, showing a 63.0 reading. That was a full point higher than analysts had predicted, meaning that consumers were more optimistic about their own financial situations than many had thought. This is considered bad news for bonds and mortgage pricing because increasing sentiment usually means consumers are more willing to make large purchases in the near future.

The bond market will close at 2:00 PM ET today ahead of the Labor Day holiday. It will remain closed Monday and reopen Tuesday morning. The stock markets will be closed Monday also. It does not appear that this early close is going to affect trading much, but I have extended the lock recommendation to short-term period closings as a precautionary move.

Next brings us the release of a couple of important reports, including Tuesday's release of August's ISM manufacturing index that measures manufacturer sentiment. We also will get August's employment figures next week along with a couple of other relevant releases.

                   Mel

Wednesday's bond market has opened in negative territory following a much larger than expected jump in durable goods orders. The stock markets are showing gains with the Dow up 62 points and the Nasdaq up 12 points. The bond market is currently down 6/3l, but we will likely see this morning's mortgage rates improve slightly due to strength in bonds late yesterday.

Yesterday's FOMC minutes release indicated that the Fed does not feel interest rates are too low, keeping open the possibility of more rate cuts to stimulate economic activity in the future. However, this likely could only come if inflationary pressures eased enough for the Fed to feel comfortable with the move. But, the minutes did indicate a rate hike is more likely to be the next move than a possible reduction to key short-term interest rates.

The Commerce Department gave us July's Durable Goods Orders this morning, saying that new orders for big-ticket items rose 1.3% last month. This was much higher than analysts had expected and indicates that the manufacturing sector was stronger than thought last month. This is generally bad news but this data can be quite volatile from month to month so its impact on rates this morning has been fairly minimal.

Thursday's only data is the first revision to the 2nd Quarter Gross Domestic Product (GDP). Last month's preliminary reading revealed a 1.9% pace of growth. A smaller than expected upward revision should help lower mortgage rates Thursday, especially if the inflation portion of the release does not get revised higher. Current forecasts are calling for a 2.7% annual rate. There will be a final revision issued next month, but it probably will have little impact on mortgage rates.

The Labor Department will post weekly unemployment claims numbers tomorrow morning also. Analysts are expecting to see 425,000 new claims, which would be a decline from the previous week.

                        Mel

Thursday's bond market has opened in negative territory despite stock weakness and weaker than expected economic data. The stock markets are posting losses with the Dow down 50 points and the Nasdaq down 21 points. The bond market is currently down 16/32.

Neither of today's economic reports were considered to be highly important to the markets. The Labor Department said that 432,000 new claims for unemployment benefits were filed last week. This was a little lower than expected, but not enough of a difference to affect trading or mortgage rates because the figures cover only a single week.

The Conference Board gave us some favorable news with the release of their Leading Economic Indicators (LEI) for July. Today's posting showed a drop of 0.7% in the indicators, which was a much bigger drop than many had expected. This means that economic activity is expected to slow rather quickly in the next three to six months. That eases inflation concerns and helps keep mortgage rates lower.

There is no relevant data scheduled for release tomorrow, leaving the stock markets to be the biggest influence on bonds. Fed Chairman Bernanke will be making a speech at a Kansas City Fed gathering at 10:00 AM tomorrow. There is no question and answer period expected, but if Mr. Bernanke does say anything that hints at the Fed's next move, the markets may react accordingly. However, I suspect that this speech will not be a market-mover.

                   Mel

Wednesday's bond market has opened up slightly despite stock gains and a lack of economic news on the day's agenda. The stock markets are showing solid gains after earlier weakness this week. The Dow is currently up 37 points and the Nasdaq up 5 points. The bond market is currently up 1 15/32,  we will likely see price improvements this afternoon with mortgage rates.

There is no relevant economic news scheduled for release today. The bond market will likely be influenced by stock swings, if we are to see any afternoon changes to mortgage rates today. Stocks of mortgage giants Fannie Mae and Freddie Mac have come under fire again and have posted considerable losses this week as investors become more concerned about their stability and the housing market. This could influence mortgage rates also if the fears continue to rise and should be kept on our radar.

Early tomorrow morning, the Labor Department will post last week's new unemployment claims numbers. They are expected to fall by 12,000 claims from the previous week to 438,000 new claims. A larger than expected number of claims would be considered good news for bonds and mortgage rates, however, this is not one of the more important reports we see each week. Therefore, unless the number varies greatly from forecasts its impact on rates will probably be minimal.

The Conference Board will give us the last piece of monthly data for the week 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. Current forecasts are calling for a decline of 0.3% in the index.

                        Mel

Thursday's bond market has opened in positive territory despite a larger than expected increase in consumer prices and early stock gains. The stock markets are showing noticeable gains after initially opening in the red. The Dow is currently up 142 points while the Nasdaq has gained 28 points. The bond market is currently up 12/32.

This morning's release of July's Consumer Price Index (CPI) showed that consumer prices rose 0.8% last month, doubling analysts' forecasts. Fortunately, the core data reading was much closer to forecasts with an increase of 0.3%. These figures raised inflation concerns since they pushed the annual rate of inflation to a 17-year high. However, the bond market seems to be reacting in a much more subtle way than one would expect since inflation is the number one nemesis for long-term securities such as mortgage related bonds.

The Labor Department reported this morning that 450,000 for new benefits were filed last week. This was a decline from the upward revision of 460,000 of the previous week, but was still higher than the 436,000 that were expected. This can be considered good news for bonds and mortgage rates, however, since this data only tracks a week's worth of claims its' impact on the markets is usually limited.

There are two pieces of data scheduled for release tomorrow. The first is Industrial Production data for July. 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 moderately high importance and may cause movement in mortgage rates. Analysts are currently expecting to see no change in production between June and July. An increase in output could lead to higher mortgage rates tomorrow, while a weaker than expected figure should help push rates lower.

The second report of the day will come from the University of Michigan who 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 tomorrow.

                        Mel

Wednesday's bond market has opened up slightly then fell after this morning's economic data showed no surprises. The stock markets are showing early losses with the Dow currently down 98 points and the Nasdaq down 8 points. The bond market is currently down 22/32, but we will likely see little change in this morning's mortgage rates due to weakness in bonds late yesterday.

The Commerce Department gave us July's Retail Sales numbers early this morning, saying that sales fell 0.1% last month. This matched forecasts and hasn't had much of an impact on this morning's bond trading or mortgage rates. The portion of the report that excludes more volatile auto sales showed that sales rose 0.4%, which was slightly below forecasts. That could be considered a bit of good news for bonds, but has not influenced trading as of yet.

Tomorrow morning brings us the release of July's Consumer Price Index (CPI). The CPI is one of the most important reports we see each months it measures inflation at the consumer level of the economy. There are two readings in the report- the overall index and the core data reading. The more important of the two is the core data because it excludes more volatile food and energy prices. Current forecasts call for an increase of 0.4% 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.

Also tomorrow is the weekly release of new unemployment claims by the Labor Department. This release normally has little impact on the bond market or mortgage rates but due to the previous week's spike to 455,000 claims, analysts will likely be watching this data a little closer than usual. Another increase could send bond prices higher and mortgage rates lower, assuming the CPI doesn't reveal stronger than expected inflation readings.

                   Mel

Tuesday's bond market has opened well in positive territory with the stock markets posting sizable losses during morning trading. The Dow is currently down 69 points while the Nasdaq is down 1.70 points. The bond market is currently up 22/32, but we will likely see little change in this morning's mortgage rates due to weakness in bonds late yesterday.

Today's only economic news was June's Trade Balance report that revealed a much smaller than expected trade deficit. The report showed that it stood at $56.8 billion compared to the $61.9 billion that was expected. However, this data is not considered to be of high importance to mortgage rates and has not had much of an influence on today's pricing.

July's Retail Sales data will be released 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 larger decline than expected 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 a decline of 0.1%.

July's Consumer Price Index (CPI) will be released at 8:30 AM Thursday. The CPI is one of the most important reports we see each month. It measures inflation at the consumer level of the economy. There are two readings in the report- the overall index and the core data reading. The more important of the two is the core data because it excludes more volatile food and energy prices. Current forecasts call for an increase of 0.4% 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.

            Mel

Thursday's bond market has opened in positive territory following sizable stock losses. The stock markets are reacting to weak earnings news as the Dow fell 99 points and the Nasdaq up 4 points. The bond market is currently up 31/32, which will likely improve this morning's mortgage rates.

The Labor Department gave us last week's unemployment figures early this morning. They reported that 455,000 new claims for benefits were filed when analysts had predicted 420,000. This was a 6 year high for new claims and raises concerns that the employment sector is quickly weakening. This is good news for bonds and mortgage rates, however, since this data tracks only a week's worth of filings it is not considered to be of high importance to the bond market.

Yesterday's Treasury auction went fairly well and led to afternoon buying in bonds. Today's sale will bring 30 year bonds to market and if investor demand is also strong we could see afternoon improvements in bonds again today. Results of the auction will be posted at 1:00 PM ET.

Employee Productivity and Costs data for the second quarter will be released early tomorrow morning. It 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, but since it is the only data of the day it may influence rates slightly. Analysts are currently expecting to see an increase in productivity of 2.5%. A higher than expected reading could help improve bonds, leading to lower mortgage rates.

                        Mel

Friday's bond market has opened down slightly following the release of this morning's economic news that had mixed results but leaned more towards unfavorable to bonds. The stock markets are also in negative ground with the Dow down 49 points and the Nasdaq down 12 points. The bond market is currently down 9/32, which will likely have little impact on this morning's mortgage rates. However, if bonds fall any further we likely will see mortgage rates revise higher later today.

 The Labor Department gave us this morning's big news with the release of July's Employment figures. They said that the unemployment rate moved higher by 0.2% to a four year high of 5.7%. Analysts were expecting an increase but only to 5.6%. This was the part of the report that was favorable to bonds.

 The negative portion came in the number of payrolls added or lost during the month. Analysts were expecting to see a loss of 75,000 jobs last month, but today's report

showed a loss of 51,000 payrolls. It also revised June's loss upward by 11,000 jobs. However, this was the seventh consecutive monthly decline in payrolls, which indicates that the employment sector remains soft. Generally speaking, that is good news for bonds even though its not as good as we had hoped for.

 Today's second release was the Institute for Supply Management's (ISM) Manufacturing Index for July. It showed a stronger than expected reading of 50.0. Analysts were expecting to see a larger decline to a reading of 49.2. This means that more surveyed manufacturers felt business had improved during the month than was expected. That is also considered to be a negative for bonds, but was not enough to create much concern in the market.

 Next week brings us a handful of relevant economic reports for the markets to digest, beginning with July's Personal Income and Outlays early Monday morning. This report is considered to be moderate-to-high in importance and can influence bond trading and mortgage rates. However, I would not expect to see a significant move in rates solely as a result of this report.

 The rest of the week includes data on manufacturing and worker productivity along with another Federal Open Market Committee (FOMC) meeting.