By James Brooks

The bond market is up 9/32 (2.39%), we should improve today's mortgage rateby .125 of a discount point.

We had the first of this week's two relevant Treasury auctions take placeyesterday. The 5-year Note sale did not go very well with severalbenchmarks pointing towards weak interest in the securities. This newsdidn't cause bonds to slide as they were already losing ground beforeresults were posted at 1:00 PM ET. However, the news certainly did nothelp the cause either. It also gives us little to be optimistic about intoday's 7-year Note auction. Results will also be posted at 1:00 PM ET,so any reaction will come during early afternoon trading. Strong investordemand is good news for the broader bond market and mortgage rates.

Also yesterday was the release of the minutes from the January31/February 1 FOMC meeting. They didn't reveal too many surprises,but did reiterate the possibility of another bump to key short-term interestrates in the immediate future. Many analysts now think that the Fed willmake another quarter point move at their March 14-15 meeting. This isearlier than what some were expecting at the beginning of the year. Itdoesn't change much of anything as long as the Fed makes only threerate increases this year. More increases would be bad news formortgage rates, while fewer would be positive.

Today's only economic data was last week's unemployment figures at8:30 AM ET. They showed that 244,000 new claims for unemploymentbenefits were filed last week, up from the previous week's revised238,000 initial filings. This was slightly higher than the 242,000 that wasexpected, making the data favorable for mortgage rates.

Tomorrow has two pieces of economic data that we will be watching,both at 10:00 AM ET. January's New Home Sales report is one. This isthe least important report of the week, and is the sister report toWednesday's Existing Home Sales data. It also measures housingsector strength and mortgage credit demand, but usually does not havea significant impact on bond trading or mortgage rates unless it shows asignificant surprise.

Tomorrow's report is expected to show an increasein sales of newly constructed homes, hinting at strength in the new homeportion of the housing sector too. The smaller the number of sales, thebetter the news it is for bonds and mortgage rates.

The University of Michigan's revision to their Index of ConsumerSentiment for February will close out the week's calendar. Currentforecasts show this index rising slightly from its preliminary estimate of95.7. This index is fairly important because it helps us measureconsumer confidence that translates into consumer willingness to spend,but is not considered to be a major market mover. The lower the reading,the better the news it is for mortgage rates.

If I were considering financing/refinancing a home, I would.... Lock if myclosing was taking place within 7 days... Lock if my closing was takingplace between 8 and 20 days... Lock if my closing was taking placebetween 21 and 60 days... Float if my closing was taking place over 60days from now... This is only my opinion of what I would do if I werefinancing a home. It is only an opinion and cannot be guaranteed to be inthe best interest of all/any other borrowers.