Yesterday June's Personal Income and Outlays revealed a 0.1% and a 0.6% rise in spending. Both readings were stronger than expected, indicating that consumers have more money available to spend and are using it. This is bad news for the bond market and mortgage rates because consumer spending makes up two-thirds of the U.S. economy.

The second report of the day was June's Factory Orders. It showed a much larger increase in new orders than was expected. The 1.7% jump in orders was a full percentage point higher than analysts had expected. That means that the manufacturing sector may be strengthening faster than many had thought, which is also bad news for bonds and mortgage pricing.