This holiday-shortened week brings us the release of only three monthly economic reports that are relevant to the bond market and mortgage rates but two of them are considered to be extremely important. The government shutdown isn’t going to affect these releases because two come from non-governmental organizations and the third is a Labor Department report, which is funded through next September and not part of the partial shutdown. Tomorrow has nothing of importance taking place. There is no relevant economic data or other events scheduled that are expected to influence mortgage rates. The stock markets will be open for a full day of trading, but the bond market will close at 2:00 PM ET tomorrow. All markets will be closed Tuesday for the New Year’s holiday. We can expect bonds and mortgage rates to be driven by stock movement tomorrow. Large gains in stocks should pressure bonds and cause mortgage rates to rise. On the other hand, if stocks are showing sizable losses, bond yields and mortgage rates should improve tomorrow. Thursday has two items that can affect rates, one being more important than the other. The first 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 170,000 new payrolls. Good news for mortgage rates would be a much smaller increase in payrolls. The Institute for Supply Management (ISM) will post their manufacturing index for December late Thursday 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 57.3 reading in this month's release, meaning that sentiment fell this month. November's reading stood at 59.3. 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 Thursday morning as it would point towards a stronger manufacturing sector. The biggest 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 3.7% while 180,000 new jobs added to the economy and an increase in earnings of 0.3%. 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 higher. Also Friday is a speaking engagement by Fed Chairman Powell that will be watched closely. He is expected to speak in Atlanta at 10:15 AM ET. The speaking panel also includes previous Fed Chairs Janet Yellen and Ben Bernanke. With three Fed Chairs speaking at the same event, there is a strong possibility of their words affecting the markets and mortgage rates. Overall, Friday is the most important day of the week, although Thursday may also be an active day for rates. The calmest day will likely be Wednesday unless stocks stage a big rally or sell-off. The government shutdown isn’t having an impact on mortgage rates, at least not yet. There is little chance of it ending this week, so it should continue to be a non-factor the next several days. If still floating an interest rate and closing in the near future, please proceed cautiously- especially the latter days of the week.