From 10,000 feet the story of the week was "Mortgage Rates Rebound from Losing Streak", but when you look closer, I think the bigger story was "Mortgage Rates React to Economic Data. Twice!".

Once for the worse, once for the better. Yesterday was the better and it was the reason why mortgage rates rebounded from their three day losing streak.

Since mortgage rates have basically moved (lower) at will for the majority of the summer, I think we should stop and call attention to the times when mortgage rates actually react to economic data. Not because I feel the bond market is trying to tell us the economic environment is fundamentally worse or better (LONG TERM OUTLOOK), but because I think the bond market is telling us it is looking for some directional guidance (SHORT TERM OUTLOOK).

Plain and Simple: it's any ones guess what mortgage rates do on a day over day basis, investing outlooks are extremely non-committal, but recent behavior seems to suggest economic data is motivating the market.