• Wednesday’s mortgage rates should be approximately .125 - .250 of a discount point higher than Tuesday’s early pricing due to stronger than anticipated economic data and news of military action between Iran and the U.S. that questions the status of the ceasefire. The bond market is currently down 6/32 (4.47%).

 • Stocks are reacting to the same Iran news as bonds by pushing the Dow lower by 380 points and the Nasdaq down 123 points.

 • The first of this morning’s batch of economic data came from the ADP Employment report at 8:15 AM ET. It showed 122,000 new private sector jobs were added to the economy last month, exceeding forecasts of 115,000. This was also higher than April’s revised 105,000 payrolls, signaling growth in the employment sector.

 • This morning’s second release also gave us signs of stronger than expected economic activity. The Institute for Supply Management (ISM) announced their service index stood at 54.5 last month, up from April’s 53.6. The higher reading means more surveyed service sector executives felt business improved during the month than did in April.

 • April's Factory Orders data that was posted the same time as the ISM index gave us more unfavorable news. It revealed a 4.8% jump in new orders at U.S. factories for durable and non-durable goods when estimates had it at 4.3%. This report doesn’t carry a strong level of importance in the markets, so it is not having an impact on this morning’s bond trading or mortgage pricing.

 • We also have the Fed Beige Book release at 2:00 PM ET to watch. This report details economic conditions throughout the U.S. via business contacts in each Federal Reserve region. Analysts are looking for insight into inflationary pressures, employment situations and how the war with Iran may be impacting business. This info is used by the Fed when determining monetary policy at their FOMC meetings. If there is a reaction in the bond market or mortgage pricing, it will happen during mid-afternoon trading.

 • Tomorrow has two moderately important economic releases. First up will be the weekly unemployment update at 8:30 AM ET. It is expected to show 213,000 new claims for jobless benefits were made, down slightly from the previous week’s 215,000 initial filings. Rising claims are a sign of weakness in the employment sector, so the larger the number tomorrow, the better the news it is for mortgage rates.

 • Also early tomorrow morning will be the release of revised 1st quarter Productivity and Costs data. This report measures employee output and employer costs for wages and benefits. Many analysts believe that the economy can grow with low inflationary pressures when productivity is high. Tomorrow’s update is predicted to show productivity stood at a 0.8% annual pace. This is one of the few reports where a higher reading is considered favorable for mortgage pricing.

 • 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.