Thursday’s bond market has opened fairly flat despite the release of mostly favorable economic news. The stock markets are showing sizable gains with the Dow up 45 points and the Nasdaq up 16 points. The bond market is currently unchanged from yesterday’s close, which will likely keep this morning’s mortgage rates at yesterday’s levels.

The Labor Depart ment released its 1st quarter worker productivity data early this morning, saying that productivity rose at a 3.2% annual rate. This was higher than expected and is good news because high levels of productivity allows for low inflationary economic growth. However, the portion of the report that measures wage costs rose at a rapid pace. This is negative news because it raises concerns over wage inflation.

The other piece of data posted this morning was weekly unemployment claims. It showed that 322,000 new claims for benefits were filed last week, exceeding analysts’ forecasts of 310,000. This is also good news for bonds, but because this data covers only a week, its impact on bonds and mortgage rates is usually limited.

The markets are anxiously awaiting tomorrow’s Employment report. This data has the ability to lead to a huge rally or major sell-off in the bond market and large changes in mortgage rates. The ideal situation for the bond and mortgage market s would be an increase in the unemployment rate and fewer than expected new payrolls.

Just how much of an improvement or worsening depends on how much variance there is between forecasts and actual readings. This could turn out to be a wonderful day in the mortgage market, but it also carries risks of seeing mortgage rates move higher if the Labor Department posts stronger than expected readings. Current forecasts are calling for a 4.7% unemployment rate and approximately 200,000 new jobs with average earnings rising 0.3%.

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… 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 intere st of all/any other borrowers.