Wednesday's bond market has opened in positive territory after this morning's following news of a much weaker than expected economy during the 1st quarter of the year. The stock markets are rallying with the Dow up 170 points while the Nasdaq has gained 43 points. The bond market is currently up 5/32, but we will see an increase in this morning's mortgage rates of approximately .125 of a discount point due to weakness late yesterday.

This morning's major economic news was the release of the preliminary version of the 1st Quarter Gross Domestic Product (GDP). The GDP is the sum of all products and services produced in the U.S. and is considered to be the best indicator of economic growth or contraction. Today's release revealed that activity fell at an annual rate of 6.1% during the first three months of the year. This was much weaker than the 4.7% decline that was expected and shows that the economy was slowing quicker than thought. This is good news for bonds and mortgage rates because slowing economic activity eases inflation concerns and makes bonds and mortgage related securities more attractive to investors.

We also have the adjournment of the FOMC meeting this afternoon. The meeting began yesterday and will likely end with an announcement of no change to key short-term interest rates. But we will likely see volatility in the markets following the 2:15 PM ET post-meeting statement as investors learn the amount of Treasury securities that the Fed purchased and intend to purchase in the near future. If they announce that more debt was bought than was expected, we could see a bond rally this afternoon that leads to lower mortgage rates. However, a disappointing total could create a sell-off and cause an upward revision to rates later today.

Tuesday's bond market has opened in negative territory after this morning's only relevant economic data revealed a much stronger than expected reading. The stock markets are showing modest gains with the Dow up 21 points and the Nasdaq up 5 points. The bond market is currently down 5/32, but we still should see an improvement in this morning's mortgage rates of approximately .125 of a discount point due to strength in bonds late yesterday.

The Conference Board reported late this morning that their Consumer Confidence Index (CCI) for April jumped to 39.2. This is a six-month high for the index and a much stronger reading than the 28.8 that was expected. That indicates that consumers were much more optimistic about their own personal financial situations than many had thought. The negative impact on bonds comes from the belief that higher levels of confidence makes it much more likely that consumers will make larger purchases in the near future. And since consumer spending makes up two-thirds of the U.S. economy, any related data is considered important and can influence bond trading.

Tomorrow is going to be a pretty interesting day. We have the possibility of seeing plenty of volatility in the markets and therefore, mortgage rates also. The first event is the release of the preliminary version of the 1st Quarter Gross Domestic Product (GDP). This is arguably the single most important report that we see on a regular basis. The GDP is the sum of all products and services produced in the U.S. and is considered to be the best indicator of economic growth or contraction. I expect this report to cause major movement in the financial markets tomorrow morning. Analysts are expecting to see a decline in output at an annual rate of 4.9%. A larger decline would be ideal for mortgage rates. But, a stronger than expected reading would almost certainly cause stock prices to rise and bond prices to fall, leading to higher mort gage rates tomorrow morning.

This week's FOMC meeting begins today and will adjourn tomorrow afternoon. It will likely adjourn with an announcement of no change to key short-term interest rates, but we may see some volatility in the markets following the 2:15 PM ET post-meeting statement.

With the preliminary version of the GDP being released during morning trading and the FOMC meeting adjourning during afternoon hours, there is a decent possibility of the markets changing directions more than once tomorrow. Accordingly, I strongly recommend maintaining contact with your mortgage professional if still floating an interest rate.

Friday's bond market has opened in negative territory after this morning's economic data gave us stronger than expected results. The stock markets are also contributing with the Dow up 90 points and the Nasdaq up 28 points. The bond market is currently down 14/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.

The Commerce Department reported early this morning that new orders for durable goods fell 0.8% last month. While the decline is good news for bonds, the problem is that analysts were expecting a 1.5% drop. But offsetting the headline reading was a downward revision to February's orders, meaning that new orders were not as strong as previously announced last month.

The second report of the day was March's New Home Sales data. It showed little change from February's revised sales figures, however, today's released revealed an upward revision to those figures. In other words, the market got what it was expecting little change in sales of newly constructed homes between February and March. But, the cumulative total of sales was higher than thought.

Overall, this morning's data is a little confusing, but it appears that activity was higher than previously thought in February and changed little from those higher levels last month. Are these sectors starting to stabilize? It is too soon to tell, but it does make next month's reports that track April activity that much more important.

Next week is very active in terms of economic releases scheduled to be posted. None of them are due for Monday, but there is important data scheduled for every other day of the week, including another FOMC meeting. Look for more details on next week's events in Sunday's weekly preview.

Thursday's bond market has opened fairly flat after this morning's economic news failed to give us any significant surprises. The stock markets are showing early losses with the Dow down 23 points and the Nasdaq down 6 points. The bond market is currently down 4/32, but we still will likely see an improvement of .125 of a discount point in this morning's mortgage rates due to strength in bonds late yesterday.

The Labor Department reported this morning that 640,000 new claims for unemployment benefits were filed last week. This nearly matched forecasts so has had little impact on this morning's bond trading and mortgage rates.

The second report released this morning came from the National Association of Realtors who said that home resales fell 3% last month. This was a larger decline than expected and indicates that the housing sector is not ready to rebound yet. This is good news for bonds, but this data is not considered to be a highly importa nt piece of data. Therefore, its results also have not heavily influenced this morning's mortgage rates.

March's Durable Goods Orders will be posted early tomorrow morning. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Current forecasts are calling for a decline of 1.5%. This would be a sign of manufacturing sector weakness that would be good news for bonds, especially if the report shows a larger than expected decline. A stronger level of new orders could lead to stock strength and weakness in bonds, translating into higher mortgage rates tomorrow.

The last report of the week will be March's New Home Sales data but it is the least important release of the week. It tracks approximately 15% of all home sales in the U.S., so its impact on bonds will likely be less than today's report that covered the other 85% of home sales. It is expected to show little change in sales from February's levels.

Thursday's bond market has opened in negative territory after yesterday's late stock rally has made bonds less appealing to some. The stock markets are mixed during morning trading with the Dow down 26 points and the Nasdaq up 10 points. The bond market is currently down 11/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.

Neither of today's two reports were likely to heavily influence mortgage rates. March's Housing Starts data came in well below forecasts, indicating that the new home part of the housing sector still remains weak. Even new permits, which are pulled prior to construction starting, fell much more than thought. While this is good news for bonds, its impact on today's trading and mortgage rates has been minimal because this data is not considered to be one of the more important reports we see each month.

The Labor Department announced this morning that 610,000 new claims for unemployment benefits were filed last week. This was much lower than the 658,000 that were expected. However, as with the Housing Starts data, these figures are not considered to be highly important. This time though, we can this is fortunate for mortgage rates because the drop in new claims indicates a stronger than expected labor market. Had this data been a monthly report, we may have seen a larger increase in this morning's rates than we did get.

Yesterday's Beige Book report didn't reveal any major surprises. It did show that many districts reported stabilizing in some economic indicators. This could be translated to mean that economic activity may begin to strengthen in the near future. However, it is well too soon to make that prediction yet. The report did reiterate a weak labor sector, which will make an economic recovery more difficult in the immediate future.

The final release of the week comes late tomorrow morning when the Univers ity of Michigan's Index of Consumer Sentiment will be posted. This index will give us an indication of consumer confidence, which hints at consumers' willingness to spend. If confidence is rising, consumers are more apt to make large purchases. But, if they are growing more concerned of their personal financial situations, they probably will delay making that large purchase. This influences future consumer spending data and can have a moderate impact on the financial markets. Good news would be a decline from March's 57.3 reading. Current forecasts are calling for a reading of approximately 58.5.

Wednesday's bond market has opened flat following an uneventful open in stocks and mixed results in this morning's economic data. The stock markets are mixed with the Dow up 19 points and the Nasdaq down 9 points. The bond market is currently unchanged from yesterday's close, which will keep this morning's mortgage rates close to yesterday's levels.

For what could have been a very active morning in the markets and mortgage rates, we are seeing little movement. The Labor Department gave us the very important Consumer Price Index (CPI) for March that revealed a 0.1% decline in the overall reading but a 0.2% increase in the core data. The overall reading was weaker than expected, however, the more important core data was expected to rise only 0.1%. This indicates that prices at the consumer level of the economy rose slightly more than thought when excluding volatile food and energy costs. This can be considered negative news for bonds and mortgage rates, but the market does not seem to be phased by its results.

The second report of the morning was March's Industrial Production data. It showed a much larger slowdown in production than analysts had thought. Today's report was expected to show a 0.9% decline in industrial output, but actually revealed a 1.5% drop. This means that production at factories, mines and utilities slowed much more than many had predicted. Since slowing manufacturing activity indicates a weaker economy, this news is considered favorable to bonds and mortgage rates.

There is a third report scheduled for release today. The Federal Reserve will post its Fed Beige Book report at 2:00 PM ET. This report, which is named simply after the color of its cover, details economic conditions throughout the U.S. by region. Since the Fed relies heavily on it during their FOMC meetings, its results can have an impact on the financial markets and mortgage rates if it reveals any surprises.

March's Housing Starts report is tomorrow's only monthly report, but it will most likely be a non-factor in the markets and mortgage rates. It gives us a measurement of housing sector strength and mortgage credit demand, however, usually doesn't cause much movement in mortgage pricing unless it varies greatly from forecasts. It is this week's least important report and is expected to show a decline in starts of new homes.

We also will see last week's unemployment figures from the Labor Department tomorrow morning. This data usually has little influence on mortgage rates also unless there is a wide variance between forecasts and its actual numbers. It is expected to show that 658,000 new claims for benefits were filed last week. The larger the total of new claims, the better the news for bonds and mortgage pricing.

Thursday's bond market has opened in negative territory following early stock strength. The stock markets are rallying this morning with the Dow up 192 points and the Nasdaq up 48 points. The bond market is currently down 16/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.

Today's only monthly economic data was February's Goods and Service Trade Balance. It showed that the U.S. trade deficit fell to $26.0 billion in February. This was much lower than expected and was its lowest level since 1999. Unfortunately, this data isn't considered to be highly important to mortgage rates directly. In fact, the news has had little impact on trading despite the wide variance between forecasts and the actual reading. However, news like this can strengthen the U.S. dollar versus other currencies, making U.S. securities more appealing to international investors. This is because a stronger dollar makes the securities more valuable when sold and their proceeds are converted to the investors' own currency.

The Labor Department reported that 654,000 new claims for unemployment benefits were filed last week. This was close to forecasts and also has had little influence on this morning's bond trading or mortgage rates.

Yesterday's FOMC minutes basically gave the bond market good news but consumers and businesses bad news. The minutes showed that during the last meeting the Fed revised their outlook for the economy and recovery to a worse position. They extended out their estimate of when the Gross Domestic Product (GDP), which is the most important benchmark of economic activity, will stabilize. They also renewed concerns about deflation, meaning that inflation is not an immediate concern. Overall, the minutes didn't reveal any major surprises, but did support the theory that the economy is worse than many, including the Fed, had previously thought. Generally speaking, weak economic conditions usually create a favorable environment for bonds, leading to lower mortgage rates.