MBS haven't retreated lower than their Friday levels but they also don't seem to have the will to improve today either.

Many look to the NAPM as an indication of the ISM which is set to release tomorrow.  Many analysts have upped their forecast because of the better than expected NAPM numbers this morning.  If the ISM report meets or exceeds the new forecasts, it could be very bad for rates tomorrow.

Furthermore, as rates near the bottom of their recent historical trading range, there is always more resistance for them to move lower and a much greater effect is felt from any MBS-unfriendly news.  That makes locking now the safest bet.  

If your risk tolerance is high and you are an ardent bear on the rest of the week's financial data, we could finally break through this floor that's keeping PAR rates from getting any lower than 5.375-.5.5%.  But historically, days like today are good days to lock.  There's a much smaller chance rates will improve than the chance they will worsen.  I do believe they'll improve, but we may have to endure a brief down cycle to see those improvements.  It's a tough call between float and lock for market bears today.  Tomorrow is anyone's guess, but with low volume in MBS the last several days and the economic reports increasing in importance as the week wears on, you can be sure we'll have a clearer direction with each passing day.

If you have the money to risk, and firmly believe the economic data will disappoint, floating can make you some money, but if history is a lesson, tonight is a good night to cash in your chips (and sooner than later as some lenders priced fairly aggressively today).