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Thursdays bond market has opened well in negative territory, giving back yesterdays morning gains. The stock markets are a large part of todays early selling, with the Dow up 178 points and the Nasdaq up 43 points. The bond market is currently down 18/32, which will likely push this mornings mortgage rates higher by approximately .375 - .500 of a discount.

The Labor Department said early this morning that 439,000 new claims for unemployment benefits were filed last week. This was a little higher than the previous week, but just short of expectations. However, this data is not important enough to cause this mornings bond weakness and has not had an impact on todays mortgage pricing.

The Conference Board released their Leading Economic Indicators (LEI) for October late this morning, announcing an increase of 0.5%. This means that the indicators are pointing towards economic growth over the next several months. That is considered bad news for the bond market, but it was a slightly smaller increase than analysts were expecting. Therefore, it also has had little influence on mortgage rates.

There is no relevant economic data scheduled for release tomorrow. This makes it likely that the stock markets will be center stage again. If todays stock rally extends to tomorrows trading, we could see another increase in mortgage rates as bonds move lower. However, it has been a quite volatile week and if the markets reverse direction again, it is possible to see mortgage rates recover some of this mornings losses.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

This week brings us the release of six monthly economic reports for the markets to digest. With very important data scheduled for release three different days and relevant data four of the five days, we will likely see a fair amount of volatility in the markets and mortgage pricing this week.

The first data is one of the most important reports of the week. The Commerce Department will give us Octobers Retail Sales figures early tomorrow morning. This data measures consumer spending, which is considered extremely important because it makes up two-thirds of the U.S. economy. It is expected to show a 0.7% rise in spending, meaning consumers spent much more last month than they did in September. This would be considered negative news for bonds because large increases in spending fuels an economic recovery and raises inflation concerns in the marketplace. If tomorrows report reveals a smaller than expected increase in spending, bonds should react favorably, pushing mortgage rates lower. If it shows a larger than expected increase, mortgage rates will likely move higher tomorrow.

There are two reports scheduled to be posted Tuesday. The first is October's Producer Price Index (PPI) from the Labor Department, which is one of the two key inflation readings on tap this week. The PPI measures inflationary pressures at the producer level of the economy. There are two portions of the index that are used- the overall reading and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. If it reveals stronger than expected readings, indicating that inflationary pressures are rising, the bond market will probably react negatively and should drive mortgage rates higher. If we see in-line or weaker than expected numbers, mortgage rates should fall Tuesday. Current forecasts are calling for an increase of 0.8% in the overall reading and a 0.1% increase in the core reading.

Tuesdays second report is October's Industrial Production data. It gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to reveal a 0.3% increase in production. Stronger levels of production would be considered bad news for the bond market and mortgage rates, but this data is not as important as the PPI readings are. A significant surprise in the PPI would likely make this data a non-factor in Tuesdays mortgage pricing.

October's Consumer Price Index (CPI) will be released at 8:30 AM ET Wednesday morning. This index is similar to Tuesday's PPI, except it measures inflationary pressures at the more important consumer level of the economy. The overall reading is expected to show an increase of 0.3% while the core data is expected to rise 0.1%. Weaker than expected readings would be good news for bonds and mortgage rates, while larger than forecasted increases could lead to higher mortgage rates Wednesday.

Also being released Wednesday is Octobers Housing Starts. This data gives us an indication of housing sector strength, but usually does not have a noticeable impact on mortgage rates. I dont expect this months version to be any different unless it varies greatly from analysts forecasts and the CPI matches expectations. It is expected to show a small decline in starts of new homes.

The final report of the week will come from the Conference Board late Thursday morning when they release their Leading Economic Indicators (LEI) for October. This is a moderately important report that attempts to predict economic activity over the next three to six months. It is expected to show a 0.6% increase, meaning economic activity will rise fairly rapidly over the next couple of months. Generally speaking, this would be bad news for bonds. However, since this data is considered only moderately important, its results need to vary by a wide margin from forecasts for it to affect mortgage rates.

Overall, look for any of the first three days of the week to be the most important with very important reports scheduled each day. The quietest day will most likely be Friday since there is no relevant data scheduled for release that day. The key releases will be tomorrows Retail Sales and Wednesdays CPI reports. They will probably determine whether rates close the week higher or lower than tomorrows opening levels. Since this is likely to be a fairly active week for mortgage rates, it would be prudent to maintain regular contact with your mortgage professional if still floating an interest rate.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.