Tuesday's bond market has opened down slightly following early stock gains. However, the major indexes have given back those gains to currently stand in negative territory. The Dow was up as much as 85 points during earlier trading while the Nasdaq had gained 21 points. But the Dow is currently down 10 points while the Nasdaq has now up 1 point. The bond market is currently down 5/32, but I am expecting to see an improvement in this morning's mortgage rates.

There is no relevant economic news scheduled for release today. Fed Chairman Bernanke is speaking to the Senate Budget Committee about the Federal budget and current economic conditions. His words seemed to have fizzled the early stock rally and have pushed traders back into selling mode. If stocks continue to fall further, we may see bonds rally this afternoon and possibly lead to a downward revision in mortgage rates.

Tomorrow's only relevant data is the Fed Beige Book during afternoon trading. This report details economic activity throughout the country by region. The Fed relies heavily on this data during their FOMC meetings, so look for a potential reaction during afternoon trading tomorrow. It probably will not cause a major sell off in the stock or bond markets, but could cause enough movement in bond prices to possibly improve or worsen mortgage rates slightly if it reveals any significant surprises.

Thursday and Friday brings us the release of a couple of important economic results, including Friday's Employment Report. Those reports could drive stock prices lower if they show weaker than expected results, and possibly create a bond rally that will improve mortgage rates even more. But, with the recent volatility in the markets, it is a good idea to remain in contact with your mortgage professional if still floating an interest rate.

Mel