This week brings us the release of four monthly economic reports that are relevant to the bond market and mortgage rates with two of them considered to be extremely important. In addition to those reports, we also will get the minutes from the last FOMC meeting that have the potential to influence the bond market and quite possibly mortgage rates. All of these events come over just three days. The Institute for Supply Management (ISM) will start the week’s activities by posting their manufacturing index for December late Monday morning. This highly important index measures manufacturer sentiment. A reading below 50 means that more surveyed manufacturing executives felt that business worsened during the month than those who felt it had improved. That indicates a softening manufacturing sector rather than growth. Analysts are currently expecting to see a 49.0 reading in this month's release, meaning that sentiment strengthened slightly last month. November’s 48.6 reading was the first sub-50 reading in three years and raised concern about manufacturing activity. A smaller reading will be good news for the bond market and mortgage shoppers, while a higher than expected reading could lead to higher mortgage rates Monday morning as it would point towards a stronger manufacturing sector. Wednesday has three items that can affect rates. The first of them is the ADP Employment report before the markets open, 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 of 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 our calendar. Forecasts are calling for an increase of 190,000 new payrolls. Good news for mortgage rates would be a much smaller increase in payrolls. The Commerce Department will post November's Factory Orders data late Wednesday morning. This data gives us a fairly important measurement of manufacturing sector strength. It is similar to the Durable Goods Orders release that was posted just before Christmas, except this report includes orders for both durable and non-durable goods. Durable goods are items that are expected to last three or more years such as appliances, electronics and airplanes. Examples of non-durable goods are food and clothing. Analysts are expecting to see a decline of 0.2% in new orders. This report generally does not have a huge impact on the bond market or mortgage rates, but it can influence bond trading enough to create a minor change in rates if it shows a sizable variance from forecasts. The larger the decline, the better the news it is for mortgage pricing. Also Wednesday is the release of the minutes from the last FOMC meeting. They will give market participants insight to the Fed's thinking and concerns regarding the economy, inflation and monetary policy. It is one of those pieces of information that may cause a great deal of volatility in the markets or be a non-factor, depending on what the minutes show. They will be released at 2:00 PM ET, so they won't affect the markets or mortgage rates until afternoon hours. The last FOMC meeting was followed by revised Fed forecasts and a press conference by Fed Chair Janet Yellen, so the possibility of seeing something unexpected is minimal. Still, market participants will be looking for any tidbits about the decision to raise key short-term interest rates and when the next move may be made. The big news of the week will come at 8:30 AM Friday when the Labor Department will post December's employment figures. The Employment report is arguably the single most important monthly release we see. It gives us the national unemployment rate, the number of jobs added or lost during the month and average hourly earnings, which is a key measure of wage inflation. Rising unemployment, a decline in payrolls and flat earnings would be ideal news for the bond market. Current forecasts call for no change in the unemployment rate of 5.0% while 200,000 new jobs added to the economy and an increase in earnings of 0.2%. If we see weaker than expected results, the bond market should rally and stocks should fall, improving mortgage rates noticeably Friday. However, stronger than expected readings will likely raise optimism about the economy, pushing stocks and mortgage rates sharply higher. Overall, Friday is the key day of the week with the almighty Employment report being posted, but Monday and Wednesday both also have a decent chance of being pretty active. The least active day will likely end up being Tuesday. Please still keep an eye on the markets as a couple of this week's events have the potential to cause severe market volatility.