There are five relevant monthly and quarterly economic reports scheduled this week, along with a good number of Fed speeches that have the potential to affect mortgage pricing. A couple of the reports are considered to be highly important while others are of moderate importance. The partial government shutdown shouldn’t be an issue for mortgage rates unless it carries on longer than expected. It could end as early as tomorrow but may not be until Tuesday, depending when the House of Representatives approves the revised funding packages that the Senate approved late Friday.

The Institute of Supply Management (ISM) will kick off this week's activities when they post their manufacturing index for January at 10:00 AM ET tomorrow. This highly important index tracks manufacturer sentiment by using surveyed trade executives' opinions of business conditions. It is usually the first economic data released each month and is one of the more important reports we get monthly. Predictions show a reading of 48.3, up from December's 47.9. A number below 50.0 is a sign of contraction in the sector. Therefore, the lower the reading, the better the news for the bond market and mortgage rates because weaker sentiment indicates a slowing manufacturing sector.

There is no relevant economic data scheduled for Tuesday, but Wednesday has a couple of reports scheduled. First will be January’s ADP Employment report at 8:15 AM ET. It is an employment-related report that tracks changes in private-sector jobs. While it does draw attention, it is a non-governmental report that some consider to be overrated and not a true reflection of the broader employment picture. It also is not accurate in predicting results of the monthly government report that we will get Friday. Still, because we often see a reaction to its results, it is included in this week's calendar. Analysts are expecting to see 41,000 new private jobs were added to the economy last month. A much smaller number would be favorable to mortgage rates.

Next will be the release of the ISM’s non-manufacturing index (aka service index) at 10:00 AM ET Wednesday. This is the sister report of tomorrow’s index with this version tracking business executive opinions on conditions in the service sector rather than manufacturing. It is expected to show a reading of 53.8 for January, down a little from December's 54.4. A reading above 50.0 means more surveyed executives felt business improved during the month than those who said it worsened. Good news for rates would be a much lower than expected reading that would signal the service sector was softer than thought.

Friday morning brings us the most important data of the week, assuming the government shutdown has ended. This is when January’s governmental Employment report is scheduled to be posted, which is the only release the shutdown may affect this week since the others come from non-governmental entities. It gives us broad insight into the labor market, such as the U.S. unemployment rate, number of new jobs added or lost 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 than expected payroll number and little or no rise in earnings. The current consensus is for the unemployment rate to have held at December's 4.4% and approximately 68,000 new jobs added to the economy while monthly earnings rose 0.3%. Stronger than expected numbers will likely fuel bond selling that would cause a sizable upward move in mortgage rates. On the other hand, disappointing numbers should lead to a noticeable improvement in mortgage pricing Friday morning.

The final economic report of the week is the preliminary February reading to the University of Michigan's Index of Consumer Sentiment at 10:00 AM ET Friday. This index is a measurement of consumer confidence that is thought to indicate consumer willingness to spend. Analysts are expecting to see a decline from January's 56.4, meaning surveyed consumers were less optimistic about their own financial and employment situations than last month. A larger decline would mean consumers are less likely to make a large purchase in the near future, restricting economic growth. The lower the reading, the better the news for rates.

Last week's FOMC meeting ended the Fed's mandatory quiet period. This is the 10 days prior to a meeting and the day after, when Fed members can't talk about monetary policy and related subjects. What this means is that we have plenty of speeches and other talking engagements with current Fed members this week. There a many of them scheduled, but not all of them are expected to draw much attention. Speeches set for Wednesday evening and Friday morning have topics related to the outlook for the economy and/or monetary policy. Bond traders will be watching them closely for any surprises. Those two stand out from the others as most likely to affect mortgage rates.

Overall, Friday is the most important day of the week with the Employment report being released. However, tomorrow’s ISM manufacturing index may cause a noticeable change in rates tomorrow also. Tuesday may be the calmest day for rates. There is a strong possibility that we will see multiple days this week with a sizable change in rates. Therefore, please proceed cautiously if still floating an interest rate and closing in the near future.

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... Lock 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.