Market Update 5/06/2008

By
Mortgage and Lending with CYPRESS MORTGAGE

U.S. Treasuries rose after Fannie Mae, the largest U.S. mortgage-finance company,

reported a wider-than- estimated quarterly loss and said its credit-market losses will be

greater next year. Two-year notes rose for a second straight day as the company's

results underscored concern that the crisis in financial markets will be prolonged and

kept alive bets the Federal Reserve will add to its seven interest-rate cuts since

September. Two-year note yields fell 9 basis points, or 0.09 percentage point, to 2.32

percent as of 8:54 a.m. in New York, according to bond broker BGCantor Market Data.

The price of the 2 1/8 percent security due April 2010 rose 5/32, or $1.56 per $1,000

face value, to 99 5/8. Ten-year note yields fell 5 basis points to 3.82 percent. The

market is relatively unchanged this morning.

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