Market Update 7/16/2008

Mortgage and Lending with CYPRESS MORTGAGE

U.S. Treasuries rose, with two-year yields near the lowest level since May, on

speculation slowing economic growth will stoke demand for bonds and temper

inflation. Demand for government bonds is spreading throughout the world, according

to another primary dealer, Merrill Lynch & Co. Treasuries rallied yesterday after Fed

Chairman Ben S. Bernanke said there are ``significant downside risks'' to economic

growth. The two-year note yield declined 3 basis points to 2.34 percent as of 7:10 a.m.

in New York, after sliding to 2.26 yesterday, the lowest since May 12, according to

bond broker BGCantor Market Data. The 2.875 percent security due June 2010 rose

2/32, or 63 cents per $1,000 face amount, to 101 1/32. A basis point is 0.01

percentage point. The yield on the 10-year note slid 1 basis point to 3.82 percent.

Treasuries were supported on speculation quarterly earnings from Wells Fargo & Co.,

Merrill Lynch & Co., JPMorgan Chase and Citigroup Inc. may show banks probably

added to the $417 billion of credit-related losses since last year. The market is about

.25 worse in discount this morning.

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