• Friday’s mortgage rates should be higher than Thursday’s early pricing by approximately .125 of a discount point. The bond market is currently down 4/32 (4.66%).

 • Stocks are mixed but fairly flat with the Dow down 23 points and the Nasdaq up 19 points.

 • Yesterday’s 30-year Treasury Bond auction did not draw as much interest as Wednesday’s 10-year Note sale did. The benchmarks indicated an average demand for the securities compared to other recent sales. This was a bit of a disappointment after Wednesday’s auction drew a decent demand, but the 1:00 PM ET results announcement failed to draw a reaction in the bond market.

 • This week’s third major economic release was July’s Retail Sales report at 8:30 AM ET. It revealed consumers spent less last month than they did in June by a pretty hefty margin.

 • Sales dropped 0.6% compared to June, the first decline in nine months and the largest monthly decline since May of last year. A secondary sales reading that excludes more costly and volatile auto transactions fell 0.3%. Both readings were expected to show a gain of 0.2%.

 • While the sales data was clearly favorable for bonds and mortgage rates as it shows weakness, we are seeing a minor negative reaction to the news because it may prevent the Fed from raising key short-term interest rates in the immediate future. The problem is that the Fed raises rates to slow the economy and if there are already signs of cracks, they may opt to delay taking action to bring inflation down. Inflation is the number one nemesis of the bond market because it erodes the value of a bond’s future fixed interest payments.

 • In other words, July’s sales figures were just too big of a miss from expectations for the bond market to react favorably.

 • Closing out this week’s economic calendar was the release of the University of Michigan’s Index of Consumer Sentiment for August at 10:00 AM ET. They said the index stands at 51.0, falling well short of the 54.2 that was predicted, giving us a sign that consumers felt much better about their own finances last month than they do this month. Waning confidence usually translates into softer consumer spending numbers that are needed to fuel economic growth.

 • Next week has a small handful of monthly economic reports scheduled for release and another Treasury auction, but none of them are considered to be highly important to the mortgage market. We will also get the minutes from last month’s FOMC meeting that will give us more insight into the Fed’s thought process regarding inflation and key short-term interest rates.

 • Monday has nothing of relevance scheduled, so we will be looking for weekend headlines from the Middle East to be the reason if there is a noticeable move in rates as the new week begins.

 • Look for details on all of next week’s activities in Sunday evening’s weekly preview.

 • 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... Float 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.