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Wednesday's bond market has opened relatively flat as investors prepare for today's Treasury auction. The stock markets are showing minor losses with the Dow down 13 points and the Nasdaq down 3 points. The bond market is currently up only 2/32, but due to strength late yesterday we should see this morning's mortgage rates improve by approximately .250 - .375 of a discount point.

There is no relevant economic data scheduled for release today, however, we do have the 7-year Treasury Note auction to watch. Yesterday's 5-year Note sale was met with an average demand at best, so today's 7-year sale is not expected to draw a great deal of interest. It is apparent that many traders and market participants are simple wrapping up loose ends as the year comes to a close. That will likely prevent a significant reaction to the sale results when they are posted at 1:00 PM today. This could be good news for bonds and mortgage rates since yesterday's sale and Monday' s less important 2-year auction were not overly strong.

I believe that the year-end selling in bonds appears to be over. The negative tone of the past two weeks seems to have disappeared, which allowed rates to improve late yesterday. Accordingly, I am more optimistic about mortgage rates improving in the immediate future, at least until the holiday schedule is behind us and we get next week's important economic data.

There is no relevant economic news scheduled for release tomorrow except for weekly unemployment figures. The Labor Department is expected to announce that 460,000 new claims for benefits were filed last week. This would be an increase from the previous week, but unless we see a large variance I don't think this data will have much of an impact on mortgage rates.

The bond market will close at 2:00 PM ET tomorrow and all of the U.S. financial markets will be closed Friday in observance of the New Year's Day holiday. They wil l reopen for regular hours next Monday morning.

If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float 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 interest of all/any other borrowers.