Tuesday's bond market has opened up sharply following early stock losses. The stock markets showing sizable losses, erasing a good portion of yesterday's late rally. The Dow is currently down 231 points while the Nasdaq has lost 73 points. The bond market is currently flat.

There is no relevant economic data scheduled for today or tomorrow. As expected, we are seeing the bond market fluctuate with stocks. Since stocks are in selling mode, the recent jump in bond yields has made bonds more attractive to investors. This is especially true with stocks unable to keep solid footing. The result is a significant improvement to this morning's mortgage rates.

With no data scheduled for release tomorrow and only weekly unemployment claims due Thursday, look for similar action in bonds the next two days. I feel there is still more room for bonds to improve and mortgage rates to move lower, so I am holding the float recommendation for the time being. However, that may change at any time.

The only other data scheduled for release this week is September's Existing Home Sales Friday morning. This report gives us an indication of housing sector strength and mortgage credit demand. I don't see it having much of an influence on the bond market or mortgage rates, but a reading that varies greatly from analysts' forecasts could lead to a slight change in mortgage pricing. It is expected to show a slight increase in sales from August to September.

                   Mel