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20-Mar-09 SPRING BREAK

Focus today is the important option quarterly expiry. But once again, after the resilient PPI & CPI data earlier this week showing
deflation is far from granted (and if any that would be concerning oil and food prices which is rather supportive for consumers suffering for
a while from a lowering purchasing power), some logical nice Retail Sales last week, we face a few confidence surveys rather improving
such as once more yesterday the Philadelphia Fed Index which came out better, which some strategists call a mirage given the bad
employment components released through the survey.
The reaction of the dollar should be short lived. Let's not brush the potential long-term inflationary implications of quantitative easing
under the carpet. But the idea that a pumped up monetary base will trigger inflation in the near term seems unlikely. Even if it does, the
Fed will waste no time in unwinding its operations. For that reason, the latest bout of dollar weakness won’t last. We saw it when the Fed
first undertook a major expansion of its balance sheet last autumn, only for the US currency to recover once investors realised that such a
strategy might help resolve rather than prolong the economic slump. What’s more, the Fed is not fighting a lone battle. The ECB will soon
step up its own brand of Quantitative Easing in due course, alongside reductions in its key refinancing rate to 0.5%. That should help take
the steam out of the euro, which is now about 15% above its value against the greenback, according to economists. Accordingly, the good
target of a dollar/euro exchange rate should be 1.10 by the autumn.
About the Euro, it is interesting to note its uncanny ability to rally hard in the last weeks of every quarter. In the last weeks of
March 2008, the Euro jumped from 1.48 to 1.58 against the US$. In the last weeks of June 2008, the Euro rose from 1.54 to 1.58. In the
last weeks of Sept 2008, from 1.40 to 1.48. In Dec 2008, it moved from 1.27 to 1.41… Of course, this may simply reflect the underlying
macro events more than anything else (whether the Bear Stearns “merger” with JPM, the uncovering of the Madoff scam, yesterday’s
unveiling of the US quantitative easing plans, etc…). But could the end of quarter moves also be explained by the fact that large players,
such as central banks, are reluctant to mark a “loss” on their FX holdings? Alternatively, could these swings in the US$/Euro also reflect
the repatriation of capital away from US$-denominated hedge funds and back towards European or Asian investors?
The reaction of the equity indices should be lasting. Not only the unlimited budget put on the table to sort out the crisis will manage to
reach the real economy anytime soon, but the timing of these increasing measures is a good one as in the meantime selling pressures
should fade on equity indices, as most hedge funds redemption deals should be solved by end of March, with some left over running until
June. And the reason for the drop won't be anymore as we all gradually have to admit that the recession has seen its deep in Q4 and Q1
this year, with some promising economic signs (housing, banks) that should be boosted by the worldwide stimuli.
Option expiries, but also Geithner announcement about the details of the bad loans purchases, and Bernanke will drive the
market crazy for today. Remember that it often happens that a strong rally (up or down, we choose up) occurs once the expiries are over,
as delta hedge are no longer big, and fund managers lost protections both ways. Ideal timing for a spring break. Gap to be filled on the
upside on the Eurostoxx cash 2098/2107 and 2176/2193
WTI €/$ $/¥ 10 yr US 10 yr Euro Basic Energy Financ Health Tech Tel Indus Utilities SOX S&P NAS DOW Close

Last 51,0 1,3647 94,67 2,60 3,05 3,14 1,69 4,11 -2,31 0,39 -0,74 -0,53 1,35 -0,84 -1,30 -0,52 -1,15 US
Perf 1d % 4,29 -0,14 -0,15 -0,19 bp -17,6 bp 3,75 2,76 4,11 -2,73 0,35 -1,96 0,29 0,46 -1,15 -0,91 -0,50 -1,03 Europe
ECONOMIC DATA with impact
CAC40® REWEIGHTING : Main “winner” SAINT-GOBAIN (weight from1.27% to 1.62%) / Main “loser”TOTAL (from 17.72% to
17.66%)
DAX® REWEIGHTING : The shares of FRESENIUS PREF (weight 0.78%) and HANNOVER RE (0.41%) will be included in DAX® and
will replace INFINEON(0.11%) & DEUTSCHE POSTBANK (0.21%) which do no longer fulfill the market capitalization requirements /
Main “winner” of this reweighting will be E.ON (new weight 10% from 8.53%) / Main “loser” SIEMENS (weight from 10.09% to 9.76%)
EUROSTOXX REWEIGHTING : Main “winner” BBVA (from 2% to 2.10%), SANTANDER (from 3.9% to 4.02%) & TOTAL (from 7.48% to
7.67%) / Main “loser” VOLKSWAGEN (from 2.25% to 1.79%) & UNICREDIT (from 1.47% to 1.18%)
Geithner possible announcement regarding the bad loans purchase details from banks
Bernanke (15h UK time)
Option quarterly expiries : Footsie 9h15/9h30 UK time / Eurostoxx 11h / Dax 12h / CAC 15h/ single stocks and reweighting on the close
POSITIVE IMPACTS
BAYER – JNJ : FDA said the benefits of Xarelto, outweighs its risks for ST use in patients undergoing hip or knee replacement surgery
INSURANCE : French mutual insurers Macif, Maif and Matmut plan to merge as a result of the "increasingly tough competitive
environment.", according to an internal letter from Macif sent to its staff yesterday
TELEFONICA expects Latin America to remain its growth engine in 2009, and that operations there will generate 2-digit revenue growth
this year / The CEO is confident the company would achieve targets such as its EPS target of €2.30 in 2010
UBS : U.S. authorities withdrew their request for administrative assistance from Switzerland after reaching a settlement last month that
gave them access to UBS clients’ identities. UBS agreed on Feb. 18 to pay $780m and disclose the names of about 300 US clients
PEUGEOT’s CEO reiterated that a merger with FIAT is unlikely even if the door is not close for complementary partnership
INFINEON : The German state of Saxony is prepared to take a stake of 25% in Qimonda to help the company exit bankruptcy (FAZ)
NEGATIVE IMPACTS
NOVARTIS : Stiefel Laboratories, a privately held pharmaceutical maker, is considering selling itself in a deal that could be worth several
billion dollars and has drawn interest from a number of major drug companies, including Novartis (WSJ)
SANOFI : The European Medicines Agency has issued a recommendation against the approval of H5N1 avian flu strain vaccine Emerflu
UNIPOL : FY08 Gross Premiums €7.89bn ( €7.92bn e) / PTP €134.3m (€282m e) / Write-down €464m / No Dividend (€0.04 e) / Sees
2009 significantly better vs 2008 / CEO said on he had never thought of leaving his job
BARCLAYS is alleged to have made about £1bn a year in profit through tax avoidance (Guardian)
BANCO POPOLARE : Fitch cut its LT issuer default rating to 'A-' from 'A'
SANTANDER : Hugo Chavez reiterated that his government plan to nationalise Santander's 98% owned Banco de Venezuela unit
RESULTS DIVIDENDS EVENTS
Today Hermes / Prudential / Aegis / HeidelbergCement / FedEx / Novo Nordisk (DKK 6.00) Nordea Bank shareholder meeting
Generali / Intesa San Paolo / Alleanza Assicurazioni / Morgan
Friday HSBC rights issue 5 per 12 Iberdrola AGM
Stanley / Goldman Sachs
Monday Synthes (CHF 1.10) /
Tuesday Banco Popolare / Metro AG / Swiss Life
Hochtief / TUI Travel / TUI AG / Scottish & Southern Energy
Aviva (GBp 22,12222) / B Sky B (GBp 8,333333) / DSM AGM / UK real estate conf at Merrill
Wednesday trading statement / Sainsbury trading statement /
International Hotel Group (GBp 22,44444) Lynch
Nizhnekamskneftekhim / A2a
TRADING IDEAS
Upside gap to be closed on the Eurostoxx cash 2098/2107 & 2176/2193 for info
BUY L OREAL / METRO / EON / ROCHE / STM / ACCOR / AIR FRANCE / LAFARGE on reversal Head & Shoulder
 WWW.GLOBAL-EQUITIES.COM / DEL SARTE / + 33 (0) 1 44 43 33 24

20-Mar-09 SPRING BREAK

BUY BP / TOTAL / ENI to play oil and possible economic recovery soon
BUY UNILEVER / THYSSEN / ARCELOR on double bottom possibility

BUY ROCHE / SELL SANOFI // BUY LVMH / SELL PPR // BUY PHILIPS / SELL SAP // BUY METRO / SELL AHOLD
BROKER METEOROLOGY
BAYER .........................................RAISED TO BUY................................................................................................. BANK OF AMERICA
DSM ..............................................RAISED TO HOLD FROM SELL ..............................................................................................BY ING
EADS ............................................RAISED TO NEUTRAL FROM UNDERWEIGHT................................................................. BY HSBC
LUKOIL.........................................RAISED TO OUTPERFORM FROM NEUTRAL ..................................................BY CREDIT SUISSE
ROSNEFT.....................................RAISED TO OUTPERFORM FROM UNDER ......................................................BY CREDIT SUISSE
VOLVO .........................................RESUMED AT BUY ...................................................................................... BY BANK OF AMERICA
SOLVAY .......................................SARTED AT OVERWEIGHT..................................................................................... BY JP MORGAN
NOVATEK ....................................RAISED TO BUY FROM NEUTRAL .............................................................. BY GOLDMAN SACHS
SCANIA ........................................RAISED TO OVERWEIGHT FRO M NEUTRAL ....................................................... BY JP MORGAN
DANONE .....................................RAISED TO HOLD FROM SELL .............................................................................................BY S&P
SOLARWORLD............................RAISED TO BUY FROM HOLD ...................................................................... BY GOLDMAN SACHS

DEUTSCHE TELEKOM................CUT TO UNDERPERFORM FROM NEUTRAL ...................................................BY CREDIT SUISSE

VOLVO .........................................CUT TO UNDERWEIGHT FROM NEUTRAL............................................................ BY JP MORGAN
ATLAS COPCO............................CUT TO NEUTRAL FROM BUY ................................................................... BY BANK OF AMERICA
XTRATA .......................................CUT TO HOLD FROM BUY .................................................................................................... BY RBS
BRITISH LAND ............................CUT TO HOLD FROM BUY ...........................................................................BY DEUTESCHE BANK
THEOLIA ......................................CUT TO NEUTRAL FROM BUY ..................................................................... BY GOLDMAN SACHS
RENEWABLE ENERGY...............CUT TO NEUTRAL FROM BUY ..................................................................... BY GOLDMAN SACHS

PLEASE FIND BELOW ON THE NEXT PAGE OUR MORNING ECO

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20-Mar-09 SPRING BREAK

CHART OF THE DAY

U.S. continuing jobless claims (thousand)
Since 2007

5500

5000

4500 Source: D

4000

3500

3000

2500

2000
2007 2008 2009

Source : Department of Labour

The number of Americans collecting jobless benefits swelled to a record 5.47 million, showing that formers employees are
unable to find new work as companies are sharply cutting costs.

ECONOMIC DATA
Time Country Indicator Period GE forecasts Consensus Previous
07.00 GMT Germany Producer prices February -0,2%,+1,3%YoY -1,2%,+2,0%YoY
07.45 GMT France Wages QoQ (final) 4 th quarter 0,3%QoQ 0,3%QoQ
09.00 GMT Italy Unemployment rate 4 th quarter 7,0% 6,7%
09.00 GMT United-States Bullard speaks on monetary policy
10.00 GMT Euro zone Industrial production January -4,0%,-15,5%YoY -2,6%,-12,0%YoY
04.00 GMT United-States Bernanke speaks on panel at convention in Phoenix

Inde x e s P rice % 5 D a ys Ytd Forex Price % 5 Days Ytd

DJIA 7400,8 3,22% - 15,67% EUR/USD 1,3642 5,55% -2,33%
S&P 500 784,0 4,45% - 13,20% EUR/JPY 129,17 -1,93% 1,89%
Nas daq 1483,5 4,03% - 5,93% USD/JPY 94,69 3,50% 4,22%
CA C 40 2777,0 3,07% - 13,70% Oil Price % 5 Days Ytd
DA X 4043,5 2,21% - 15,94% Brent $/b 48,9 10,26% 17,12%
Eur os tox x 50 2039,6 3,92% - 16,67% Gold Price % 5 Days Ytd
DJ 600 171,9 2,85% - 13,35% Gold $/oz 957,5 2,99% 8,56%
FTSE 100 3816,9 2,96% - 13,92% Rates USA Euro Japan
Nikkei 7946,0 10,39% - 10,31% Central Banks* 0,25 1,50 0,10
Shanghai Comp 2277,2 6,18% 25,06% Overnight 0,15 0,70 0,10
Sens ex ( India) 8926,5 7,89% - 7,47% 3 Months 0,19 0,62 0,26
MICEX ( Rus s ia) 784,9 7,79% 26,70% 10 Y ears** 2,60 3,05 1,27
Bov es pa ( Bras il) 40453,4 3,32% 7,73% *US: Fed Funds; Jap: Overnight; Euro: Ref i
** Euro: German Bund rate So urc e : B lo o m berg
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20-Mar-09 SPRING BREAK

ECONOMIC DATA PREVIEW

No major economic data due in the United-States.

Watch in Euro area the release of the industrial production for January due at 10.00 GMT. The industrial production is expecting to
sharply devrease as the global economic downturn is humping the exportations and has the credit crunch is cutting household
demand /JB

ECONOMY

UNITED-STATES : THE NUMBER OF AMERICANS COLLECTING JOBLESS BENEFITS SWELLED TO A RECORD 5.47 MILLION.
American companies continue to cut jobs as the domestic demand is strongly hit by the credit crunch and as the global economic
downturn is sharply cutting the demand for American goods abroad. Indeed the number of Americans collecting jobless benefits
surged to an historical high at 5.74 million (forecast 5.32 million). Meanwhile initial jobless claims slightly decrease from 658 000 to
646 000 (forecast 655 000). This small improvment should not overshadow the fact that companies are presently over cutting jobs as
60% of the lay off decisions are directly linked to the economic fundamentals but 40 % are the consequence of a fear state of mind.
This means that companies are cutting jobs much more that they should.It could be a good new for the fastness of the job market
rebound when the recovery will take place around this summer according to our forecast.

UNITED KINGDOM : BUDGET DEFICIT SURGED IN FEBRUARY

United Kingdom had a 9 billion pound ($12.8 billion) budget deficit in February (forecast £8.3 billion) in February. This is the largest
monthly deficit since at least 1993. this data left a cumulative borrowing total with just a month to go till the end of the fiscal year at £
75 billion. This is more than tree times higher than last year data. Obviously this budget deficit swell underlined the effects of the
downturn of the economy but there are as well signs of a structural black hole in the public finances./JB
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20-Mar-09 SPRING BREAK

VIX index : impliedvolatility on the S&P 500 $Libor -3-Month(InterbankRate)
6
85
80 5,5
75
5
70
65 4,5
60
55 4
50
3,5
45
40 3
35
30 2,5
25
20 2
15 1,5
10
5 1
20/03/2007 20/09/2007 20/03/2008 20/09/2008 20/03/2009 20/03/2007 20/09/2007 20/03/2008 20/09/2008 20/03/2009
Source : Bloomberg Source : Bloomberg

United States : 10-year Treasury yield 10-year Treasury spread USA-Euro zone
5,5 1,2
5,25 1
5
0,8
4,75
0,6
4,5
4,25 0,4
4 0,2
3,75
0
3,5
3,25 -0,2
3 -0,4
2,75
-0,6
2,5
2,25 -0,8

2 -1
20/03/2007 20/09/2007 20/03/2008 20/09/2008 20/03/2009 20/03/2007 20/09/2007 20/03/2008 20/09/2008 20/03/2009
Source : Bloomberg Source : Bloomberg

Oil : Brent ($/b) Forex : Euro vs Dollar (EUR/USD)

150 1,65
140
1,6
130
1,55
120
110 1,5
100
1,45
90
1,4
80
70 1,35
60
1,3
50
40
1,25

30 1,2
20/03/2007 20/09/2007 20/03/2008 20/09/2008 20/03/2009 20/03/2007 20/09/2007 20/03/2008 20/09/2008 20/03/2009
Source : Bloomberg Source : Bloomberg