Market Update 4/29/08

By
Mortgage and Lending with CYPRESS MORTGAGE

Treasuries were little changed, headed for their first monthly decline since June, on

speculation the Federal Reserve will cut interest rates tomorrow for the seventh time

since September and then indicate it's ready to stop. A nine-month rally, the longest

since 2000, was poised to come to an end after the Fed arranged bank lending

programs and cut borrowing costs to stem losses in the credit markets. Still, two-year

notes were supported today as traders speculated government reports will show the

world's biggest economy still faces the risk of a recession. The two-year note yield fell

3 basis points to 2.31 percent as of 11:51 a.m. in London, according to bond broker

BGCantor Market Data. The 2 1/8 percent security due in April 2010 gained 2/32, or 63

cents per $1,000 face amount, to 99 20/32. The yield will drop back below 2 percent in

the second half even if the Fed leaves rates unchanged after cutting tomorrow, Kind

forecasts. The yield on the 10-year bond was little changed at 3.82 percent. A basis

point is 0.01 percentage point. The market is .125 to .375 better in discount this

morning.

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