Thursday’s bond market has opened in negative territory yet again despite no new major relevant headlines. Stocks are showing early losses of 263 points in the Dow and 42 points in the Nasdaq. The bond market is currently down 12/32 (5.33%), taking the benchmark yield to its highest level since 2002. This morning’s losses, coupled with afternoon weakness yesterday, should cause an increase in this morning’s mortgage rates of approximately .375 - .500 of a discount point if compared to Wednesday’s early pricing.

Today’s first economic release was last week’s unemployment update at 8:30 AM ET. It revealed 197,000 new claims for jobless benefits were filed last week, down slightly from the previous week’s revised 198,000 and lower than forecasts of 200,000. Declining initial claims are a sign that the employment sector strengthened during the week, meaning we have to label the report bad news for bonds and mortgage rates. However, this is just a weekly snapshot with a minor variance from forecasts, so it is highly unlikely this is the reason bonds are where they are this morning.

Today’s second economic release came from the Institute for Supply Management (ISM) at 10:00 AM ET. They announced their September manufacturing index stood at 54.5, falling a little from August’s revised 54.8. The decline means surveyed manufacturing executives felt better about business conditions in August than they did last month. This is a sign of slowing manufacturing activity that can be labeled good news for rates, but it wasn’t enough of a change for traders to turn their attention away from current geopolitical events and oil prices/inflation that have been driving the bond market lately.

Tomorrow has the almighty monthly Employment report set for release at 8:30 AM ET. Some of the closely watched readings in the report are September’s unemployment rate, the number of new jobs added or lost during the month and the average hourly earnings change. The best combination for the bond market and mortgage rates would be an increase in the unemployment rate, a much smaller payroll number than expected and little or no increase in earnings. Current forecasts are calling for no change from August's unemployment rate of 4.1%, approximately 95,000 new jobs added to the economy and a 0.3% rise in earnings. Stronger than expected readings would technically be bad news for bonds and mortgage rates. However, there is a chance we could see a favorable reaction to modestly stronger than predicted numbers because it would allow the Fed to be more aggressive with rate hikes to bring down inflation, which is more important to the bond market than a month of strong data. It will be interesting to see what happens tomorrow.

August's Factory Orders report is tomorrow's second release. It is similar to last week's Durable Goods Orders data in giving us a measurement of manufacturing sector strength, but this version includes new orders for both durable and non-durable goods. It is not one of the more important reports we get each month, especially since it is coming on the same day as the Employment report. Analysts are expecting the report to show no change in new orders, indicating the manufacturing activity was flat last month. The bond market would like to see a large decline, but it is unlikely that this data will draw much attention from the markets.

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.