The Institute for Supply Management released it's Manufacturing index this morning with much weaker than expected reading of 47.7.  Any reading below 50 indicated a contracting manufacturing sector and the expected reading was 50.9.

Though there has been other important news released today such as a slight improvement in construction spending and volatility in commodities/currencies, the ISM number is really the thing moving markets today.

The bond market has just been waiting for a sign of weakness, and this is it.  MBS prices are up sharply, almost a full discount point in cases over Monday.  Some lenders will be late in releasing rate sheets this morning, but expect a PAR NOTE rate available at 5.625% and possibly 5.5% among the most competitive lenders.

Lock Comment:  This puts us again at the bottom of the yield curve for MBS's in the past 2 years.  Even if it continues to trend down, locking is the safe bet.  However, floating is a risk that can pay off very well if jobs data is weak tomorrow and Friday.  So, the economic data suggests floating with caution, while the technical deviation from mean yields suggests locking.  If you cannot afford to lose money, today could be a good day to lock.  As the the yield curve may test it's lower boundary over the next 2 days in the midst of potential trader panic, floating is a moderate risk that could pay off well.