Market Update 4/28

Mortgage and Lending with CYPRESS MORTGAGE

Two-year Treasuries rose before government reports this week that economists

forecast will show U.S. gross domestic product barely increased in the first quarter and

the economy lost jobs this month. The two-year U.S. note snapped a 10-day slide on

speculation yields at the highest level since January will rekindle investor demand.

Futures contracts showed that even though most traders have increased bets the

Federal Reserve will hold its benchmark interest rate at 2.25 percent on April 30, the

majority of wagers are still on a quarter-percentage point cut. The two-year note yield

fell 4 basis points, or 0.04 percentage point, to 2.38 percent as of 8:38 a.m. in New

York, according to bond broker BGCantor Market Data. The price of the 2 1/8 percent

security due in April 2010 gained 2/32, or 63 cents per $1,000 face amount, to 99 1/2.

Two-year notes pared gains in anticipation of U.S. stock- market advances. Ten-year

yields were little changed at 3.86 percent. They may fall to 3.5 percent by the end of

this quarter and stay around 3.80 percent in the second half of this year, Meister

forecast. The market is unchanged to .25 better in discount this morning.

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