Market Update 6/27/208

Mortgage and Lending with CYPRESS MORTGAGE

Treasuries rose, paring earlier declines, as crude oil touched a record and U.S. stock

futures dropped, boosting demand for the relative safety of government debt. Yields on

two-year notes fell yesterday the most in almost three weeks as equities tumbled,

sending the Dow Jones Industrial Average to its lowest level since 2006. The yield on

the two-year note fell 4 basis points to 2.62 percent at 8:09 a.m. in New York,

according to BGCantor Market Data. It earlier touched 2.71 percent. The price of the

2.875 percent security due June 2010 rose 2/32, or 63 cents per $1,000 face value, to

100 1/2. Crude oil for August delivery rose as much as $2.62 a barrel to $142.26. U.S.

stock futures fell, indicating the Standard & Poor's 500 Index may extend its fourth

straight weekly drop, as record oil prices dragged down consumer shares and mobilephone

companies declined on concern demand is waning. Treasuries are still headed

for their biggest quarterly loss in four years because of speculation in past weeks that

rising energy prices would prompt the Federal Reserve to boost interest rates. The

market is relatively unchanged in discount this morning.

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