Friday's bond market has opened in negative territory after this morning's economic data gave us mixed results. The stock markets opened with early losses but have since rebounded. The Dow is currently up 16 points and the Nasdaq is up 2 points. The bond market is currently down 12/32, but we will likely see little change to this morning's mortgage rates due to strength late yesterday. This morning's losses will erase the gains that may have been expected from the afternoon improvements we saw yesterday.

There were three relevant reports posted this morning, but they failed to give us a clear picture of an improving economy or further weakness. The first was the University of Michigan's update to their Index of Consumer Sentiment for April. It revealed a reading of 65.1 that exceeded forecasts of 61.5, indicating that consumers were more comfortable with their own financial situations than many had thought. This can be considered a negative for bonds because a higher level of confidence usually translates into increases in consumer spending.

The second was March's Factory Orders data that gave us favorable results. The Commerce Department said that new orders for durable and non-durable goods fell 0.9% in March, which was a larger than expected drop. They also announced a sizable downward revision to February's orders (from 1.8% gain to .7% gain), meaning that factory orders were weaker than expected over the past couple of months.

The most important data of the morning was the Institute for Supply Management's (ISM) manufacturing index. They announced a reading of 40.1 that exceeded forecasts by a couple of points. That means that more surveyed manufacturers felt business had improved during the month than had said so last month. Since this means that manufacturing activity may be improving, it is considered bad news for bonds.

Next week is fairly light in terms of the number of econom ic reports scheduled for release, but it does yield some very important employment data. The only relevant data that is expected to influence bond trading and mortgage rates comes out later in the week.

Tuesday's bond market has opened flat following a relatively calm opening for stocks and a lack of any significant surprises in this morning's testimony by Fed Chairman Bernanke. The stock markets are showing somewhat minor losses at the moment with the Dow down 27 points and the Nasdaq down 29 points. The bond market is currently nearly unchanged from yesterday's close, but we should still see an improvement in this morning's mortgage rates of a approximately .125 of a discount point due to strength late yesterday.

There was no important economic news scheduled for release today. But Chairman Bernanke is giving his speech before a Joint Economic Committee. His headline comment was that the economy will likely begin to expand later this year, effectively ending the recession. However, he also stated that activity and a broader expansion will be slow and that unemployment may rise further. Overall, it can be considered a cautiously optimistic outlook, whic h doesn't differ greatly from many analysts' predictions.

There is no relevant economic news scheduled for release tomorrow. The Treasury will sell 10-year Notes tomorrow and post results of the sales at 1:30 PM ET. If it was met with a strong demand, we should see bond prices rise during afternoon trading. If the reaction is strong in the market, it could lead to afternoon improvements to mortgage rates. The flip side of that though, is a weak interest from buyers that could lead to bond selling and higher mortgage rates late tomorrow.

The Labor Department will release its 1st Quarter Productivity and Costs data early Thursday morning and April's Employment figures Friday morning. Thursday's report is fairly important, but Friday's data is one of the most important reports we see each month.