Market Update 7/9/2008

By
Mortgage and Lending with CYPRESS MORTGAGE

U.S. Treasuries fell as stocks rose and European Central Bank President Jean-Claude

Trichet said inflation was at ``worrying'' levels, indicating central banks will have to do

more to damp rising prices. Two-year notes led declines as stocks in Asia and Europe

rebounded, sapping demand for the relative safety of government debt. Inflation is

unlikely to moderate until next year, Trichet said today in Strasbourg, France. The twoyear

note yield climbed 3 basis points, or 0.03 percentage point, to 2.51 percent by

8:05 a.m. in New York, according to BGCantor Market Data. The price of the 2.875

percent security due June 2010 fell 2/32, or 94 cents per $1,000-face amount, to 100

22/32. The 10-year note yield added 3 basis points to 3.92 percent. The extra yield that

10-year notes offer over two-year Treasuries narrowed to 1.41 percentage points, from

1.47 points on July 7. The market is relatively unchanged to .125 better this morning.

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