Tuesday's bond market has opened up sharply as economic concerns and strong stock weakness has brought bonds into favor this morning. The Dow is currently down 243 points while the Nasdaq has lost 43 points. The bond market is currently up 58/32, we will likely see an improvement in this morning's mortgage rates.

There are no relevant economic reports scheduled for release today. There are five economic reports worth watching this week that are likely to affect mortgage rates in addition to the minutes from the last FOMC meeting. Tomorrow brings us three of those releases, including the week's least important. January's Housing Starts will be posted early tomorrow morning, giving us an indication of housing sector strength and mortgage credit demand. It usually does not affect rates unless it varies greatly from forecasts. Current forecasts are calling for a decline in starts of new housing.

January's Industrial Production data will be released mid-morning tomorrow. It gives us a measurement of manufacturing sector strength by tracking output at U.S. factories. Mines and utilities and can have a moderate impact on the financial markets. Analysts are expecting to see 1.4% decline in production from December to January. A larger than expected decline in output would be good news and should push bond prices higher, lowering mortgage rates tomorrow.

The minutes from last FOMC meeting will be released tomorrow afternoon. Traders will be looking for any indication of the Fed's next move regarding monetary policy. They will be released at 2:00 PM ET, therefore, any reaction will come during afternoon trading. However, with little likelihood of the Fed making a change to key short-term rates anytime soon, these minutes will likely not heavily influence trading or lead to a change in mortgage rates during afternoon trading.

Overall, the most important day of the week will likely be Friday with the CPI being released, but tomorrow and Thursday may also be active days for mortgage rates. There is a strong likelihood of seeing an active week for mortgage rates.

                   Mel