By James Brooks

The bond market is down 8/32 (1.85%), which should push today's mortgage rates higher by approximately .125 of a discount point.

The Institute for Supply Management (ISM) gave us their manufacturing index for October at 10:00 AM ET this morning. It showed a reading of 51.9 that was a little higher than the 51.7 that was expected and September's 51.5. This means that more surveyed manufacturing executives felt business improved last month than did in September. That makes the data bad news for bonds and mortgage rates. However, bonds appeared to be headed towards a bad morning even before this report was released. Therefore, today's increase in rates is not just a result of this piece of data.

Tomorrow has two events scheduled that may influence mortgage rates. The day's only economic relevant economic data is the ADP Employment report at 8:15 AM ET. It has the potential to cause some movement in the markets if it shows much stronger or weaker numbers than expected. This report tracks changes in private-sector jobs of ADP's clients that use them for payroll processing. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not accurate in predicting results of the monthly government report that follows a couple days later. Still, because we have seen reaction to the report, we should be watching it. Analysts are expecting it to show that 165,000 new payrolls were added. The lower the number of jobs, the better the news it is for mortgage rates.

Tomorrow also has the adjournment of this week's FOMC meeting. It is widely expected that the Fed will not make a change to key short-term interest rates. Chairperson Janet Yellen and friends have indicated they expect to make a rate hike before the end of the year, but it would come as a major surprise if it came tomorrow. The Fed traditionally does not make changes to monetary policy close to a presidential election. Therefore, the consensus is that the rate hike will come during December's FOMC meeting. The meeting will adjourn at 2:00 PM ET and does not include economic projections or a press conference. These meetings normally have a strong likelihood of causing volatility in the markets. However, I believe this one will have less of an impact than usual as it is not likely to bring many surprises.

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.