Tuesday’s bond market has opened in negative territory despite favorable economic data and a decline in oil prices. Stocks are mixed but fairly calm with the Dow down 93 points and the Nasdaq up 1 point. The bond market is currently down 2/32 (5.24%). However, weakness late yesterday is going to cause this morning’s mortgage rates to be approximately .250 of a discount point higher than Monday’s early pricing. If you saw an intraday increase in rates yesterday afternoon, you should see a smaller move this morning.

Today’s only relevant economic data was the release of September's Consumer Confidence Index (CCI) at 10:00 AM ET. The Conference Board announced a reading of 81.9 for this month, falling sharply from August’s 88.6. This was also noticeably lower than expectations, indicating consumers felt much better about their own financial situations last month than they do this month. Since waning confidence often translates into slower consumer spending, we can label the report good news for bonds and mortgage rates. Unfortunately, bond traders remain cautious about the Middle East and other factors, preventing them from reacting to this moderately important piece of data.

Tomorrow’s data increases in importance. We have three reports for the markets to digest tomorrow with one of them carrying a label of highly important. First will be September's ADP Employment report at 8:15 AM ET. This report tracks changes in private-sector jobs, using ADP's payroll processing clients as a base. However, it is not accurate in predicting results of the much more influential monthly government report that follows a couple days later. Still, because we have seen noticeable reactions to the report at times, it is on our calendar. Forecasts show approximately 69,000 new payrolls were added to the economy. Good news for mortgage rates would be a much lower number.

The report likely to draw the most attention tomorrow is August’s Personal Income and Outlays data at 8:30 AM ET. It will give us an indication of consumer ability to spend and current spending activity. The theory is, if consumer income is rising, they have more money to spend each month. Analysts are expecting to see a 0.4% rise in income while spending rose 0.8% during the month. This report also includes important inflation readings that the Fed relies on during their FOMC meetings (PCE). The overall PCE is expected to show a 0.4% increase while the more important core PCE that excludes more volatile food and energy costs is predicted to rise 0.3%. Since rising inflation erodes the value of a bond's future fixed interest payments and causes the Fed to raise key short-term interest rates, stronger than expected readings would likely lead to higher mortgage rates tomorrow morning.

Also set for release early tomorrow morning is the second revision to the 2nd Quarter Gross Domestic Product (GDP) reading. The GDP is the sum of all products and services produced in the U.S. and is considered to be the best measurement of economic growth or contraction. However, this data is quite aged now (covers April through June) and will likely have little impact on the bond market or mortgage pricing unless it varies greatly from previous readings. Market participants are looking more towards next month's release of the current quarter's initial GDP reading. A large upward revision from the previous estimate of 1.5% would be considered negative for rates as it means the economy was stronger than thought.

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... Lock 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.