Market Update 7/18/2008

Mortgage and Lending with CYPRESS MORTGAGE

U.S. Treasuries fell for a third day after Citigroup Inc. reported a narrower-thanforecast

second- quarter loss, sapping demand for the relative safety of government

assets. The drop pushed the yield on the 10-year note up through 4 percent as the

biggest U.S. bank by assets said it lost $2.5 billion on writedowns of about $7.2 billion.

Citigroup's report follows better-than-expected profit at JPMorgan Chase & Co. and

Wells Fargo & Co. this week. The yield on the benchmark 10-year security rose 2

basis points to 4.01 percent by 7:04 a.m. in New York, according to bond broker

BGCantor Market Data. The 3.875 percent security due May 2018 fell 6/16, or $1.89

per $1,000 face amount, to 98 29/32. A basis point is 0.01 percentage point. The twoyear

yield advanced 5 basis points to 2.54 percent. The market is about .25 worse this

morning in discount.

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