By James Brooks

The bond market is up 4/32 (2.46%), which should improve today's mortgage rates by approximately .125 - .250 of a discount point.

The first of today's two relevant economic releases was January’s Employment report at 8:30 AM ET. It revealed that the U.S. unemployment rate rose 0.1% to 4.8% last month and that 227,000 new jobs were added to the economy. The payroll number was much higher than the 180,000 that was expected, making it bad news for bonds and mortgage rates. However, in a bit of positive news, downward revisions to December and November’s payroll numbers eliminated 39,000 jobs. Still, we have a higher unemployment rate (positive for bonds) contradicting a stronger payroll number (negative). In other words, they more or less offset each other.

What is driving bonds higher this morning is the weaker than expected average earnings reading. It came in at up 0.1% when analysts were expecting to see a 0.3% rise. Furthermore, December’s previously announced 0.4% increase was revised to up only 0.2%. These readings ease concerns about wage inflation that was appearing to be gaining steam and can easily fuel broader inflation within the economy. The softer than expected earnings also should affect the Fed’s thought process when considering to raise key short-term interest rates. I believe that is why we are seeing a positive reaction to the report in bonds and mortgage rates this morning despite the surprise payroll number.

Today’s second piece of data was December's Factory Orders data at 10:00 AM ET. The Commerce Department announced a 1.3% rise in new orders for both durable and non-durable goods. This was close to forecasts of a 1.4% rise, so its impact on today’s trading has been nearly non-existent.

Next week is very light in terms of economic releases and other events that are expected to affect mortgage rates. There is little data being posted. In fact, the biggest events will likely be a couple of Treasury auctions the middle days.

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.