• Wednesday’s mortgage rates should be close to Tuesday’s early pricing because of weakness in bonds late yesterday. If you saw an intraday increase yesterday afternoon, you should see an improvement this morning of about the same size. The bond market is currently up 7/32 (4.15%).

 • Stocks are helping the cause with the Dow down 77 points and the Nasdaq down 198 points.

 • Yesterday’s 30-year Treasury Bond auction drew a relatively decent demand from investors. The benchmarks we use indicated interest in the securities was above average compared to other recent sales, slightly exceeding demand in Monday’s 10-year Note sale. We saw even less of a reaction to the 1:00 PM ET results announcement than we did Monday, meaning the auction had no impact on mortgage rates.

 • The first two of today’s four reports came at 8:30 AM ET when November’s Retail Sales report and wholesale inflation indexes were released for October and November.

 • The sales data showed consumers spent more in November than many had thought. The 0.6% increase in overall sales exceeded forecasts of 0.4%, as did a secondary reading that excludes more costly and volatile auto transactions (up 0.5% vs 0.3%). Stronger consumer spending numbers are bad news for bonds and mortgage rates unexpected strength in spending fuels broader economic growth that makes bonds less appealing to investors and leads to higher mortgage rates.

 • This morning’s other early release was November’s Producer Price Index (PPI) that included data from October also. It revealed wholesale level inflation rose 0.2% while core data that excludes more volatile food and energy costs was unchanged. Both readings were a bit softer than expected for the month.

 • Bad news came in the annual rate for both readings that came in at a 3.0% pace. These were higher than expected and up from the previous readings of 2.7%. This data points towards wholesale inflation being hotter than expected year-over-year, even though the monthly readings were good news for bonds.

 • Today’s third economic release was December’s Existing Home Sales report from the National Association of Realtors. They announced home resales jumped 5.1% last month, likely due to a decline in mortgage rates. Home sales have been extremely sensitive to any dip or increase in mortgage rates.

 • We will also get the Federal Reserve's Beige Book report at 2:00 PM ET. We aren’t expecting to see a significant change in conditions since the last update, but the report does carry enough importance to affect rates if there is a surprise since the Fed uses this report during their monetary policy meetings. Traders will be focused on feedback about rising prices (inflation) and details about the employment situation in each region, in addition to other comments. If there is a reaction to this release, it will come during mid-afternoon trading.

 • Tomorrow’s only relevant economic news will be the weekly unemployment update at 8:30 AM ET. It is expected to show 212,000 new claims for jobless benefits were filed. That would be an increase from the previous week’s 208,000 initial filings. Rising claims are a sign of weakness in the employment sector, so the higher the number tomorrow, the better the news it will be for rates.

 • Visit our Daily Commentary page on our site for detailed explanations on current news that is relevant to mortgage rates.

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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.