This week brings us the release of five pieces of economic data that are worth watching. The most important ones are early and late in the week, so we should see the most movement those days. Because the data is spread throughout the week, we could see noticeable changes to rates multiple days. June's Personal Income and Outlays data will kick off the week at 8:30 AM ET tomorrow morning. This report helps us measure consumer ability to spend and current spending habits. If it shows sizable increases, bond selling could lead to higher mortgage rates. Current forecasts are calling for an increase of 0.3% in income and a 0.2% rise in spending. A larger than expected increase in income means consumers have more funds to spend, which is not favorable to bonds because consumer spending makes up over two-thirds of the U.S. economy. Ideally, we would like to see declines in spending and income, but the smaller the increase in each, the better the news for mortgage rates. The Institute for Supply Management (ISM) will release their manufacturing index for July late tomorrow morning. This index measures manufacturer sentiment by surveying trade executives about business conditions during the month and is considered to be of high importance to the markets. A reading above 50.0 means that more surveyed executives felt that business improved last month than those who said it had worsened. Analysts are expecting to see a slight change from June’s 53.5. Forecasts are calling for a reading of 53.7, meaning manufacturer sentiment improved slightly last month. That would be neutral news for bonds and mortgage rates. If we see a much smaller reading, we can expect the bond market to rally and mortgage rates to drop tomorrow. On the other hand, a larger increase could lead to higher rates to start the week. June's Factory Orders data is Tuesday's only relevant monthly data, coming at 10:00 AM ET. It helps us measure manufacturing sector strength by tracking orders for both durable and non-durable goods during the month of June. It is similar to last week's Durable Goods Orders report that tracks orders for big-ticket items only. Since a significant portion of the data was released last week, this report likely will not have a big impact on the markets. Analysts are expecting to see an increase in new orders of approximately 1.8%. A smaller than expected increase would be considered good news for bonds and mortgage pricing, but it will take a large variance from forecasts for this report to heavily influence Tuesday's mortgage rates. The ADP Employment report will be released before the markets open Wednesday, which has the potential to cause some movement in the markets if it shows much stronger or weaker numbers. This report tracks changes in private-sector jobs in the company'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 very accurate in predicting results of the monthly government report that follows a couple days later. Still, because we sometimes see a noticeable reaction to the report, it is on this week's calendar. Forecasts show an increase of 220,000 new payrolls. The lower the number, the better the news it is for mortgage rates. Thursday has no monthly or quarterly data scheduled, but the week’s calendar closes with the almighty monthly Employment report early Friday morning. This report gives us the U.S. unemployment rate, number of jobs added or lost during the month and average hourly earnings for July. The best scenario for the bond market is rising unemployment, a sizable loss of jobs and little change in earnings. While many believe the preliminary reading to the GDP is the single most important report in general, it is posted quarterly rather than monthly like the Employment report. Friday's report is expected to show that the unemployment rate remained at 5.3% last month while approximately 227,000 jobs were added to the economy. Due to the importance of these readings, we will most likely see quite a bit of volatility in the markets and mortgage pricing Friday morning following their 8:30 AM ET posting. Overall, I am expecting Friday or tomorrow to be the most active days for mortgage rates. The middle days should be calmer and Thursday appears to be the best candidate for least active day. Besides the data we should also watch the major stock indexes for bond and mortgage rates direction. Sizable stock gains should pressure bonds and mortgage pricing. However, if stocks go into selling mode, conditions are right for bonds to benefit, driving mortgage rates lower.