By James Brooks

The bond market is up 6/32 (2.26%), which should improve today's mortgage rates by .125 of a point.

Today had two pieces of economic data for the markets to digest. The first and more important one was the preliminary reading of the 2nd Quarter Gross Domestic Product (GDP). It showed a 2.3% increase in the GDP from April through June that was a little softer than expectations. The data shows that the economy rebounded from a weak first quarter but at a slower pace than many had thought. Most forecasts were calling for an increase of 2.5% or higher. It appears that the markets weren't overly impressed or concerned with the news as both stocks and bonds have shown minimal reaction. Still, we can consider the reading slightly favorable for bonds and mortgage rates.

The second report of the morning was last week's unemployment figures that showed 267,000 new claims for unemployment benefits were filed last week. This was an increase from the previous week's 255,000 initial claims but was not as high as the 272,000 that was predicted. The good news is that the data indicates the employment sector weakened slightly last month. The not so good news is that it was still stronger than analysts thought. Therefore, we can consider the data neutral for mortgage rates.

There is a 7-year Treasury Note auction taking place today that may have a small impact on this afternoon's mortgage rates. If the sale was met with a strong demand from investors, we could see the broader bond market improve enough to lead to a slight downward revision to mortgage rates. However, a weak interest in the securities could lead to a slight increase. Results of the sale will be posted at 1:00 PM ET, so any reaction will come during afternoon hours.

Tomorrow closes the week with two pieces of economic data that are sort of worth watching. The 2nd Quarter Employment Cost Index (ECI) that tracks employer costs for wages and benefits is the first, coming at 8:30 AM ET. This gives us a measurement of wage-inflation. If it shows a large increase, we may see wage inflation concerns rise as employers will need to pass those increases into the pricing of their products and services. That would cause the bond market to fall and mortgage rates to rise. A smaller than expected increase would be good news for the bond market and mortgage pricing. Current forecasts are showing a rise of 0.6%.

And July's University of Michigan Index of Consumer Sentiment just before 10:00 AM ET will wrap up the week's activities. It will help us measure consumer optimism about their own financial situations. This data is considered relevant because rising consumer confidence usually translates into higher levels of spending that adds fuel to the economic recovery and is looked at as bad news for bonds. Tomorrow's release is an update to the preliminary reading we saw two weeks ago, so unless we see a drastic revision to the preliminary estimate of 93.3, I think the markets will probably shrug off this news.

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.