Market Update 7/2/2002

Mortgage and Lending with CYPRESS MORTGAGE

Treasuries rose after a private report showed companies in the U.S. cut 79,000 jobs in

June, more than forecast. The yield on the two-year note fell 2 basis points, or 0.02

percentage point, to 2.62 percent at 8:20 a.m. in New York, according to BGCantor

Market Data. The price of the 2.875 percent security due June 2010 rose 1/32, or 31

cents per $1,000 face value, to 100 15/32. The yield on the 10-year note fell 2 basis

points to 3.96 percent. The employment loss followed the addition of 25,000 jobs in

May, according to the report from ADP Employer Services. Economists had forecast

employers would shed 20,000 jobs in June, according to the median estimate in a

Bloomberg News survey. The U.S. lost 60,000 jobs last month, up from 49,000 in May,

the Labor Department will report tomorrow, according to the median estimate in

another Bloomberg survey. Futures contracts on the Chicago Board of Trade show

traders see an 86 percent likelihood the Federal Reserve will raise the benchmark rate

at least a quarter-percentage point by year-end. A week ago the chance was 89

percent. The market is relatively unchanged this morning.

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