Market Update 7/7/2008

Mortgage and Lending with CYPRESS MORTGAGE

Treasuries rose as traders bet deepening credit-market losses will deter the Federal

Reserve from raising interest rates. The gains pushed two-year yields to a one-month

low after Switzerland's SonntagsZeitung newspaper, citing a study by hedge-fund

manager Bridgewater Associates Inc., said credit losses at financial companies may

swell to $1.6 trillion. Investors are the most bullish on Treasuries this year, according

to a Ried, Thunberg & Co. survey before U.S. economic reports this week that may

show home sales fell and the trade deficit widened. The yield on the two-year note

declined 3 basis points, or 0.03 percentage point, to 2.51 percent at 7 a.m. in New

York according to BGCantor Market Data. It touched 2.47 percent, the lowest since

June 9. The 2.875 percent security due in June 2010 rose 2/32, or 63 cents per $1,000

face amount, to 100 22/32. Ten-year yields fell 2 basis points to 3.96 percent. The

market is relatively unchanged.

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