Bond prices are showing volatility this morning, testing support at the 50-day Moving Average then bouncing higher from the worse levels of the day. Once again, bonds are trading at the mercy of stocks which are also trading lower and near their worse levels of the day.

Housing Starts and Building Permits were reported at their lowest rates in over 10 years, confirming the slower pace of sales we’ve seen in new construction.

Initial Jobless Claims was reported higher for the third week in a row and may indicate an increasing trend for weaker employment.

A potential market mover, The Philadelphia Fed Manufacturing Index for August, is scheduled for release today.

I’ll continue watching for a successful bounce in bond prices, while monitoring stocks and economic reports that might affect rates. At this time I am recommending cautiously floating conforming loans and continuing to lock non-conforming loans