Tuesday's bond market opened in negative territory following the release of mixed inflation news, but like yesterday, has since recovered those losses. Also contributing to the rebound in bonds are losses in stocks. The stock markets are reacting negatively with the Dow down 80 points and the Nasdaq down 6 points. The bond market is currently down 2/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.

The Labor Department gave us this morning's big news with the release of July's Producer Price Index (PPI). They reported a 0.6% rise in the overall reading that was much higher than the 0.1% that was expected. The good news came in the core data reading that rose 0.1% when it was expected to increase 0.2%. This means that overall prices rose more than expected at the producer level of the economy. However, if more volatile food and energy prices were excluded, prices rose less than expected. This eases some inflation concerns and helped prevent mortgage rates from spiking higher.

Also posted this morning was June's Goods and Services Trade Balance data. It revealed that the U.S. trade deficit stood at $58.1 billion in June. This was much lower than expected. But, this report usually is not much of an influence on bonds or mortgage rates.

There are two reports scheduled for release tomorrow. The more important of them is July's Consumer Price Index (CPI) at 8:30 AM. The CPI is one of the most important reports we see each month. It measures inflation at the consumer level of the economy. As with today's PPI, there are two readings in the report- the overall index and the core data reading. Current forecasts call for an increase of 0.1% in the overall and 0.2% in the core data reading. Smaller than expected increases should lead to a bond rally and lower mortgage rates. But if we see stronger than expected readings, mortgage pricing will likely move higher tomorrow.

At 9:15 AM tomorrow, Industrial Production data for July will be posted. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is considered to be of fairly high importance and may cause movement in mortgage rates. Analysts are currently expecting to see a 0.3% increase in production. A higher level of output could lead to higher mortgage rates tomorrow, while a weaker than expected figure should help push rates lower, assuming the CPI doesn't reveal any surprises.

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.