Market Update 7/3/2008

Mortgage and Lending with CYPRESS MORTGAGE

Treasuries were little changed as a government report showed payrolls declined in

June for a sixth straight month, renewing speculation that the Federal Reserve won't

be able to increase interest rates later this year to keep inflation from accelerating.

Payrolls fell by 62,000 workers last month, more than forecast, after a 62,000 drop in

May that was greater than initially reported, the Labor Department said today in

Washington. The jobless rate remained at 5.5 percent after jumping in May by the

most in two decades. The yield on the two-year Treasury note was unchanged at 2.58

percent at 8:36 a.m. in New York, according to BGCantor Market Data. Payrolls have

fallen in each of the first six months this year, the longest streak since 2001-2002. The

economy shed jobs for 14 months beginning March 2001, the same month it entered a

recession, according to the National Bureau of Economic Research. Yields on twoyear

notes fell 7 basis points yesterday to 2.58 percent after a report by ADP Employer

Services showed companies unexpectedly shed 79,000 jobs in June, following a

revised gain of 25,000 the previous month. The market is relatively unchanged.

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