Market Update 5/07/2008

By
Mortgage and Lending with CYPRESS MORTGAGE

U.S. Treasuries were little changed after Kansas City Federal Reserve Bank President

Thomas Hoenig said inflation may force the central bank to raise interest rates, and

before a government sale of $15 billion of debt. Yields on 10-year notes were near the

highest since February as the Treasury planned to issue the biggest amount of the

securities in four years. The government will also auction $6 billion of 30-year bonds

tomorrow as part of its quarterly refunding program. The benchmark 10-year note's

yield fell 1 basis point to 3.91 percent at 7:54 a.m. in New York, according to bond

broker BGCantor Market Data. The price of the 3 1/2 percent security due in February

2018 rose 1/16, or 63 cents per $1,000 face amount, to 96 22/32. Two-year yields,

among the most sensitive to Fed changes in interest rates, were steady at 2.39

percent. The market varies based on the program this morning.

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