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8-Apr-09 CLOCK TICKING

Not everything is white, but things are certainly no longer all black. The good news is that the indicators that have already
rebounded – such as the ISM manufacturing index, retail sales and some measures of housing activity – are traditionally some of the
most forward-looking, suggesting that the economy may be in the very early stages of a recovery. The one area of the economy where we
have seen barely any signs of improvement is the labour market. In some ways that is not surprising, since the unemployment rate is a
lagging indicator which usually peaks five months after a recession has ended. But again this time things are different, and as much as we
don’t know when the recession is ending, it might be rather sooner than later given the latest trillion dollars sent to reach the economy.
In the UK, better than expected industrial production figures tentatively suggest that the drag on output from manufacturers running
down their inventories might be easing. The 0.9% monthly decline in manufacturing output in February was a substantial improvement on
the previous fall of 3.0%, and smaller than the consensus forecast of a 1.5% drop. Industrial production recorded a 1% monthly drop.
The Minutes from the FOMC meeting tonight will be the focus. The additional quantitative easing measures announced by the Fed at
that past meeting were considerable. The asset-purchasing programs and the Term Asset-Backed Securities Loans Facility (TALF) that
had previously been announced meant that even before that meeting, the Fed’s balance sheet was set to nearly double in size to more
than $3,300bn. This was because the Fed had yet to purchase most of the $500bn of mortgage-backed securities (MBS) and $100bn of
agency debt (Fannie Mae and Freddie Mac bonds) it had planned to and it had yet to lend any of the $1,000bn through the TALF that it
said it would. At the past meeting, the Fed decided to buy an extra $750bn of mortgage-backed securities, an additional $100bn of
agency debt and $300bn of Treasury securities. The Fed’s balance sheet is now on course to balloon to close to $4,500bn.
The size of the monetary base has now started to surge again, as the Fed has upped its purchases of mortgage-backed securities
and begun its purchases of Treasury securities. In another six months the monetary base will have more than doubled in size again. As it
stands, the Fed still only owns $236bn of mortgage-backed securities, compared with its new target of $1,250bn. TALF lending stood at
less than $5bn last week, compared with a target of up to $1,000bn.
The Fed’s QE has had a more marked impact on borrowing costs. Since the start of this year, three-month interbank lending rates
have been only slightly above 1%. They last week dropped to a new low of 1.16%. The collapse in mortgage rates has been even more
impressive. Treasury yields may have rebounded over the past couple of weeks, but mortgage rates have continued to fall. According to
the Mortgage Bankers’ Association, the 30-year fixed mortgage rate fell to a record low of 4.61% last week. The fall in mortgage rates has
generated a big rebound in refinancing applications, as homeowners rush to lock in rates at these record low levels. The number of
refinancing applications has doubled since the Fed announced three weeks ago that it would more than double its previously announced
target for purchases of mortgage backed securities. Overall, the Fed will be happy with the response to the actions it took three weeks
ago. Especially as the mortgage rates fall is increasing households purchasing power, and should trigger anytime soon a boost to the
housing sector once confidence is gradually coming back, which, by the way, the latest equity rise should help coming soon. (to remind
you : a 1% cut in mortgage rates is equivalent to 10% drop in housing prices in term of affordability)
Alcoa (closing at 7.79 on official session, moved up to 8 to finish on the 7.5 levels after the data) opened the earnings festival
last night in the US with some slightly lower eps (0.59 ct loss vs 0.57 expected) while revenue came out at $4.15bn above the 4.08
consensus expectation, although it should be slightly considered as out of market trend given the sector specificity. The sharp drop in
revenue compared to the same period last year being due to the economic slowdown which sent the aluminium prices 26% lower this
quarter from the previous one, and 60% down than last summer. Alcoa managed to get some 1.1bn of cash on hand, after reducing the
quarterly dividend, saving $430 mn. “We now have the strategic and operational fundamentals in place for Alcoa to emerge even stronger
when the economy recovers” said the Ceo. Next, Chevron tomorrow, and Intel on Tuesday. Like every one, the “cash is king” rule is the
one that drove Alcoa’s strategy last quarter to get ready and armed in case things were lasting, which should precisely be the reason for a
sharp and prompt activity rebound triggered by the worldwide stimuli.
A consolidation is taking place and should remain until the eastern week-end, and then the bear (!) market rally should be resuming
and head to much higher levels. Unable to close its gap yesterday (2103/2111) when reaching the 2139 level, we will be focusing on
Alcoa trading prices for now, and on this downside gap on the Eurostoxx to be closed on 2103 (cash) before nice blue sky journey…
WTI €/$ $/¥ 10 yr US 10 yr Euro Basic Energy Financ Health Tech Tel Indus Utilities SOX S&P NAS DOW Close

Last 48,2 1,3181 100,10 2,89 3,22 -3,52 -2,78 -3,43 -0,86 -2,70 -3,79 -3,31 -0,75 -3,86 -2,39 -2,81 -2,34 US
Perf 1d % -3,48 -0,69 0,32 -0,92 bp -0,1 bp -1,79 -2,15 -1,29 -0,30 -1,50 -3,23 -1,77 0,23 -1,83 -1,36 -1,43 -1,66 Europe
ECONOMIC DATA with impact
Mortgage Applications (11h gmt) / the highest the better / minor as volatile and weekly data
Oil inventories (14h35 gmt) / minor
Minutes from the March 17/18 FOMC meeting / will be interesting to see the reason why Bernanke who previously downplayed the
possibility that the Fed would buy Treasury bonds chanegd his mind (probably after watching the reaction on the UK yields), and say why
Richmond Fed president Lacker voted with the majority to expand Fed’s other credit programs which was a U-turn from the prev meeting
POSITIVE IMPACTS
PEUGEOT / RENAULT : French gov is considering additional incentives to boost auto sales when a €1k “scrappage” bonus expires at
the end of the year
FRANCE TEL : will not improve its offer for the remainder of Mobinil after Egyptian market authorities rejected it
SWISSCOM : Fastweb plans to use its cashflow to pay off its debt instead of for distribution as a dividend
NOKIA : Nokia Siemens has offered to buy key assets from Nortel as it seeks to expand its foothold in the U.S. wireless market. (wsj)
ALSTOM : signed a contract worth €160M with Polish energy group PGE
FIAT :There was an increase of 50% in orders in Italy for light commercial vehicles in March from a month earlier (source)
JUNIPER up 10% after US close, cut Q1 revenue guidance to $760-$765mln ($794mln exp) / driven by lower than expected sales to
Service Providers but cut non-GAAP operating expenses for Q1 of $375-$380mln ($408mln exp) and so manage to reach non-GAAP
EPS of $0.16-$0.17 in line with the 0.17 consensus.
NEGATIVE IMPACTS
RICARD : is set to announce a €1Bn rights issue & a deal to sell its Wild Turkey bourbon brand for $575M (Ft)
SANOFI : Biogen were nearly up 5%amid speculation the Co could be a takeover tgt / Rumours were that Sanofi could bid at least $75 .
FORTIS : The Brussels Appeals Court will rule April 10 on the suspension of voting rights of Fortis shares acquired later than Oct. 14 for
the April 28 shareholders meeting.
VEOLIA (new partial owner of HK Tramways) , plans to get the city government’s permission to build a new Central-Wanchai tram line.
MITTAL : Moody’s places Mittal BAA2 rating on review for possible downgrade
PHILIPS / THOMSON etc …might be impacted by the Sharp warning (losing 6% in Japan) saying March 31st ending year will post 130bn
yen net loss vs 100 initially forecast / Sharp made a 102 bn yen profit the year before.
RESULTS DIVIDENDS EVENTS
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8-Apr-09 CLOCK TICKING

Fed to study the end of short selling forbiden (return
of the ''uptick rule") / Intel Developper Forum /
BG Group (GBp 7,277778) / Fortum (€1.00) /
Sulzer / Belgacom AGM / Schlumberger AGM /
Today Constellation Brands Prudential (GBp 14,34444) / Sampo (€0.50) /
United Technologies AGM / Daimler AGM (08.00
Unibail-Rodamco (€1.75)
GMT) / Telecom Italia AGM (7.00 GMT) / Daimler
AGM / Julius Baer AGM/ TNT AGM
Daimler (€0.60) / Givaudan (CHF 10.00) / KPN
Thursday Chevron (AMC) / Klepierre AGM
(€0.40)
Philips / Goldman Sachs (BMO) / Intel (AMC) / BBVA (€ 1,016129) / Banco Popular (€0.08) /
Tuesday the 14th
Johnson & Johnson Belgacom (€1.68) /
Klepierre (€1.25) / Julius Baer (CHF 0.50) /
Wednesday the 15th ASML / Abbott Smith & Nephew ($0,090222) / Sulzer (CHF
2.80) / Tullow Oil (GBp 4,444444)
Danone sales / Nokia / OMV / Google (AMC) / Groupe Bruxelles Lambert (€2.30) / Lonza ( CHF
Thursday the 16th
JP Morgan (BMO) / Coca Cola Co / Pfizer 1.75)
TRADING IDEAS
BUY OIL names as TOTAL (dble bottom) / BP / ROYAL DUTCH to play downside gap close soon on WTI (49.10 / 48.43)
BUY BNP / AXA / DANONE / AEGON / TOTAL / ENI which just closed their gap ready to resume their upside move
BUY BAYER / MUNICH RE / L OREAL / EON on reversal Head & Shoulder
BUY SIEMENS / NOKIA / BASF / AIR FRANCE / AIR LIQUIDE to play bull charts & island reversal looking type
BUY PHILIPS / AHOLD / GSZ / FTE on double bottom possibility

BUY TOTAL / SELL ENI // BUY AHOLD / SELL METRO // BUY EBAY / SELL AMAZON // BUY AEGON / SELL ALLIANZ

GAP ON THE EUROSTOXX CASH 2103/2111, which fits with a few gaps on single stocks :

ARCELOR 16.15/16.86 // AIR LIQUIDE 62.00/62.53// ALSTOM 39.50/40.01 // BAYER 35.98 / 36.19 // BASF 23.34/23.71 // BBVA 6.42/6.51 // DAIMLER
19.87/20.175 // DBK 31.72/31.985 // ING 4.51/4.736 // LOREAL 52.325/52.40 // LVMH 48.48/49.01 // NOKIA 9.04/9.18 // PHILIPS 11.53/11.63 //
RENAULT 17.05/17.73 // REPSOL 13.32/13.43 // RICHEMONT 18.52/18.82 // SANTANDER 5.44 / 5.53 // SOCGEN 29.80/30.51 // ST GOBAIN
21.78/21.995 // SIEMENS 43.17/43.25 // TEL ITALIA 0.971/0.9815 // UNICREDITO 1.325/1.361 // ZURICK FIN 188.90/191.9

BROKER METEOROLOGY
DAIMLER.................................................. RAISED TO BUY FROM NEUTRAL................................................... BY GOLDMAN SACHS
TELEKOM AUSTRIA ............................... RAISED TO BUY ................................................................................ BY DEUTSCHE BANK
COMPASS................................................ RAISED TO OVERWEIGHT ............................................................. BY MORGAN STANLEY
EURAZEO ................................................ RAISED TO BUY FROM NEUTRAL................................................... BY GOLDMAN SACHS

RENAULT................................................. CUT TO SELL FROM NEUTRAL ....................................................... BY GOLDMAN SACHS

FIAT .......................................................... CUT TO NEUTRAL FROM BUY......................................................... BY GOLDMAN SACHS
ALLIANZ................................................... CUT TO NEUTRAL FROM EQUALWEIGHT ............................................... BY JP MORGAN
TELEFONICA ........................................... CUT TO HOLD FROM BUY................................................................. BY DEUTSCHE BANK
GDF SUEZ................................................ CUT TO NEUTRAL FROM BUY................................................................................. BY UBS
HOCHTIEF................................................ CUT TO NEUTRAL FROM BUY................................................................................. BY UBS
DEUTSCHE BANK ................................... CUT TO MARKETPERFORM........................................................................ BY BERNSTEIN
PIRELLI .................................................... CUT TO HOLD FROM BUY................................................................. BY DEUTSCHE BANK
RALLYE .......................................CUT TO SELL FROM NEUTRAL ................................................................... BY GOLDMAN SACHS

PLEASE FIND BELOW ON THE NEXT PAGE OUR MORNING ECO

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8-Apr-09 CLOCK TICKING

CHART OF THE DAY

GDP in Euro zone (QoQ)
since 1995

1,5

0,5

-0,5

-1

-1,5

-2
95 96 97 98 99 00 01 02 03 04 05 06 07 08

Source : Eurostat

The euro area GDP which fell of 0.2% at the second and at the third quarter get worse at the fourth quarter and dropped at a faster
pace than expected of 1.6% (forecast 1.5%), the most in at least 13 years. The recession will remained till the second quarter and the
GDP will slowly recover at the third quarter while unemployment will start rising since this next winter.

ECONOMIC DATA
Time Country Indicator Period GE forecasts Consensus Previous
0.01 GMT United Kingdom Nationwide consumer confidence March 45 43
0.50 GMT Japan Trade balance (balance of payment basis) March yen 142 billion - yen 844,4 billion
5.30 GMT Japan Bankruptcies February 10,4%YoY
7.00 GMT Germany Trade balance February € 7,5 billion € 8,5 billion
7.45 GMT France Trade balance February - € 4,2 billion - € 4,5 billion
8-10 April China Foreign exchange reserves February $ 1946 billion
11.00 GMT Germany Factory orders February -2,6%,-36,5%YoY -8,0%,-37,9%YoY
12.00 GMT United-States MBA mortgage applications April 3 th 3,0%
15.00 GMT United-States Wholesale inventories February -0,7% -0,9%
19.00 GMT United-States Fed releases minutes from March 17-18 FOMC meeting

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

DJIA 7789,6 2,49% - 11,24% EUR/USD 1,3175 -0,59% -5,73%
S&P 500 815,6 2,31% - 9,71% EUR/JPY 131,69 -0,91% 3,81%
Nas daq 1561,6 2,18% - 0,98% USD/JPY 99,96 -1,48% 9,36%
CA C 40 2902,3 3,38% - 9,81% Oil Price % 5 Days Ytd
DA X 4322,5 5,82% - 10,14% Brent $/b 50,5 3,29% 20,88%
Eur os tox x 50 2165,6 4,56% - 11,52% Gold Price % 5 Days Ytd
DJ 600 183,5 4,10% - 7,51% Gold $/oz 887,8 -4,35% 0,57%
FTSE 100 3930,5 0,12% - 11,36% Rates USA Euro Japan
Nikkei 8565,2 8,92% - 3,32% Central Banks* 0,25 1,25 0,09
Shanghai Comp 2392,7 3,45% 31,41% Overnight 0,10 0,80 0,09
Sens ex ( India) 10212,1 4,84% 5,85% 3 Months 0,19 0,69 0,22
MICEX ( Rus s ia) 843,3 9,12% 36,13% 10 Y ears** 2,89 3,22 1,46
Bov es pa ( Bras il) 43824,5 7,08% 16,71% *US: Fed Funds; Jap: Overnight; Euro: Ref i
** Euro: German Bund rate So urc e : B lo o m berg
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8-Apr-09 CLOCK TICKING

ECONOMIC DATA PREVIEW

No major economic data due in the United-States

Watch in France the trade balance for February due at 7.45 GMT. The trade deficit is expected to slightly narrow as despite the drop
of exportations importations are felling down. Watch in Germany the trade balance for February due at 7.00 GMT. The trade surplus
is expected to narrow as the global economic downturn is cutting demand for German’s goods abroad. Watch as well the factory
orders for February due at 11.00 GMT expected to drop at a slower pace than the previous month but which will remained very weak
from a year ago./JB

ECONOMY
UNITED KINGDOM : INDUSTRIAL PRODUCTION FELL ON RECORD FROM A YEAR AGO IN FEBRUARY
Industrial production fell from -2.7% in January to -1.0% in February (forecast -1.2%) and as expected reached an historical low at -
12.5% from a year ago. If we look into the breakdown, Energy sup. fell 2.4%, and Mining etc fell 0.9% since January. United Kingdom
is sharply hit by the global economic downturn cutting the demand for U.K. goods and the credit crunch is seriously slowing down
household purchase power reducing the domestic consumption. Meanwhile manufacturing output decline of 0.9% was a substantial
improvement on the previous fall of 3.0%, however from a year ago the drop reached 13.8% (forecast -14.2%). Even if U.K. economy
is mainly based on finance and all what is related to it, industry account for around 20% of the GDP like in the Euro area. In
comparison industry account only for 13% of the GDP in the United-States.

EURO ZONE : RECESSION IS DEEPENED MORE THAN EXPECTED AT THE FOURHT QUARTER
The euro area GDP which fell of 0.2% at the second and at the third quarter get worse at the fourth quarter and dropped at a faster
pace than expected of 1.6% (forecast 1.5%) and the most in at least 13 years. This fell was mainly led by the drop of household
consumption (-0.2%) and of companies investments (-0.9%)but as well as exports which dropped 2.8%. Indeed the global economic
recession is sharply reducing foreign demand and is forcing companies to reduce investments, the credit crunch and the rise of
unemployment are cutting household consumption. The Euro area is going through the worst recession of its history , unemployment
is skyrocketing and many countries are close to a social crisis. This recession will remained till the second quarter and the GDP will
slowly recover at the third quarter while unemployment will start rising since this winter./JB
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8-Apr-09 CLOCK TICKING

VIXindex: impliedvolatility ontheS&P500 $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
09/04/2007 09/10/2007 09/04/2008 09/10/2008 09/04/2009 09/04/2007 09/10/2007 09/04/2008 09/10/2008 09/04/2009
Source : Bloomberg Source : Bloomberg

UnitedStates : 10-year Treasury yield 10-year Treasury spreadUSA-Eurozone

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
09/04/2007 09/10/2007 09/04/2008 09/10/2008 09/04/2009 09/04/2007 09/10/2007 09/04/2008 09/10/2008 09/04/2009
Source : Bloomberg Source : Bloomberg

Oil : Brent ($/b) Forex: Eurovs 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
09/04/2007 09/10/2007 09/04/2008 09/10/2008 09/04/2009 09/04/2007 09/10/2007 09/04/2008 09/10/2008 09/04/2009
Source : Bloomberg Source : Bloomberg