By James Brooks

The bond market is down 10/32 (1.83%), which should move today's rates higher by approximately .125 discount point.

Yesterday's late rally in bonds was fueled by comments from Fed Chair Janet Yellen, who made a lunchtime speech to the Economic Club of New York. These type of speeches often yield no surprises and little reaction in the markets. However, yesterday's speech was different.

She gave some direct insight into the Fed's monetary policy thought process that caused a positive reaction in the bond market and mortgage rates. Her comments sounded more concerning about global economic growth than previous statements and seemed to confirm that no rate increase will come during next month's FOMC meeting. The news was well received in the bond market and led to widespread lender improvements to rates.

Yesterday's 5-year Treasury Note auction went okay but did not show a strong level of demand from investors. The benchmarks we use to gauge investor interest showed an average level of demand for the securities. Based on that, we can't be too optimistic about today's 7-year Note auction. Results will be posted at 1:00 PM ET, so any reaction will come during early afternoon trading.

Today's only relevant economic data was March's ADP Employment report at 8:15 AM ET. It showed an increase of 200,000 private sector jobs. This was a little higher than the 196,000 that was forecasted, making the data slightly negative for mortgage rates. But this isn't the cause of this morning's bond weakness. I believe that we are seeing more of a correction from yesterday's afternoon rally than anything else this morning.

Tomorrow has only last week's unemployment figures scheduled and they will come at 8:30 AM ET. They are expected to show 265,000 new claims for unemployment benefits were filed last week, matching the previous week's total.

Since rising claims hints at a weakening employment sector, the larger the number the better the news it is for mortgage rates. Although, it is worth noting that because this is only a weekly snapshot, it usually takes a surprise increase or decline for the report to noticeably affect rates.

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.