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U.K markets (Bank Holiday) and Japanese markets (National Holiday) are closed today.
The fourth consecutive monthly rise in the ISM manufacturing index in April, together with the third consecutive rise in the University of
Michigan consumer confidence index,support hopes that the worst of the recession is now behind us.
The ISM manufacturing index rose to 40.1 from 36.3, led by another sharp rebound in the new orders index to a 6-month high of 47.2
vs. 41.2. There were also a sharp rebound in the employment index (34.4 vs. 28.1) and in exports (44.0 vs; 39.0). The ISM PMI is pointing
to GDP falling at a 0.5 % annualised rate while, a few months ago the index bottmed out in the low 30s and was consistent with with a 3
% annualized decline in GDP. The index would need to climb back above 42 before it was consistant with expanding GDP.
The University of Michigan consumer confidence final index climbed to 65.1 in April (61.9 initially) from 57.3 in March. That was
the highest since September 2008 and the biggest one-month increase since October 2006. The April reading also marked the first yearly
increase since July 2007. The index of current economic conditions rose to 68.3 last month from 63.3 in March, the best reading in four
months. The index of consumer expectations climbed to 63.1 from 53.5, also the highest since September of 2008. 65 % of consumers
thought the stimulus would improve the national economy. Consumers' inflation expectations also rose, with the reading on the 1-year
inflation outlook rising to 2.8 percent in April from 2 percent in March. The 5-year inflation outlook edged up to 2.8 % from 2.6 %.
The FED is postponing the release of stress tests on the 19 biggest U.S. banks while executives debate preliminary findings with
examiners, according to government and industry officials. The results, originally scheduled for publication today, now may be revealed
on Thursday 7th. Regulators and bank executives are concerned about how the disclosure is handled because weaker institutions could
suffer a collapse in their stock prices. The Fed, which oversaw the stress tests, wants common equity to be the “dominant” element in a
bank’s primary capital. While the banks were ordered not to release the results of the stress assessments prematurely, Goldman Sachs
may have provided a hint last Thursday with its decision to sell bonds and shares, issuing $2 billion in five-year notes without a
government guarantee and making a $750 million stock offering.
U.S. equity markets were higher last week, with bond markets declining sharply. Despite the Fed’s Quantitative Easing action, long
term Treasury rates went up, widely above 3.00 % for the 10-year rate (3.15 % at the close on Friday). Rates are higher now than they
th
were on March 17 , the day before policy makers announced their intention to purchase up to $300bn in government bonds outright over
the ensuing six months, as well as buying more mortgage-backed securities and Agency debt. Yields have backed up at least 60bp since
the lows seen in the wake of that announcement. U.S. equities have rallied by nearly 30 % since March 9th and there are tentative signs
that the pace of economic contraction might be starting to slow. Had the increase in bond yields in the inter-meeting period been
accompanied by another plunge in share prices or signs that the economy was getting even worse, then the Committee’s response would
doubtless have been different. Just because policymakers have chosen to stand pat this time around does not mean that they will refrain
from ramping up their asset purchases in coming months if risk appetite starts to recede or if economy falters.

WTI €/$ $/¥ 10 yr US 10 yr Euro Basic Energy Financ Health Tech Tel Indus Utilities SOX S&P NAS DOW Close

Last 53,5 1,3318 99,46 3,15 3,17 1,53 2,96 -1,67 -0,23 0,57 1,57 1,11 2,37 -0,14 0,54 0,11 0,54 US
Perf 1d % 4,88 0,34 -0,35 0 bp 3,9 bp -1,03 0,69 0,08 0,63 -0,90 0,24 -0,39 -0,02 -1,43 0,03 -0,71 0,03 Europe
ECONOMIC DATA with impact
In the U.S., watch for Pending Home Sales and Construction Spending for March (14.00 GMT). The former are expected flat vs. +2.1
% MoM and the later is expected down –1.5 % MoM vs. –0.9 %. Any good news about the housing market may be market mover on the
upside. Construction Spending figures will help to tell us whether the first-quarter investment figures will be revised up or down in the
second estimate of GDP, due at the end of this month.
,
POSITIVE IMPACTS
.
EDF is weighting the benefits of selling its regulated electricity distribution business in the UK to help it cut the debt / The division
contributed 75% of the UK arm’s €1.2bn earnings last year & its assets are estimated to be worth about £3bn
VEOLIA-EDF : Dalkia, the outsourcing JV owned by EDF & Veolia, is looking at a sale of some of its British ops (Sunday Telegraph) /
PricewaterhouseCoopers have been appointed to review Dalkia's UK business, which could lead to a £150m sale or a capital raising.
FRANCE TELECOM : An Egyptian court ruling that FTE should tender to buy all shares in Mobinil from Orascom Telecom might not go
through (Daily Al-Masry Al-You)
VOLKSWAGEN - PORSCHE : The Porsche & Piech families are set to decide on Wednesday over a possible sale of Porsche to VW with
a ownership likely split along family lines / Separately, VW's U.S. sales of cars and light truck fell 16.1% in April while Porsche's U.S.
sales fell 35.3% (Market -34.3%)
SIEMENS and India's state-run Bharat Heavy Electricals plan to form a JV for making steam turbines in India (Economic Times)
FIAT’s Chief Executive will Today outline plans to spin-off Fiat’s core car division, joining it with Chrysler & GM Europe (Opel) & creating
a new publicly traded European car giant (FT) / CEO expects to strike an alliance with Opel by the end of May and list the new Fiat-Opel
entity before summer (Corriere della Sera)
LAFARGE announced the sale of Turkish assets worth €163 m
SCHNEIDER said there is still little visibility, but there is increasing confidence amongst its clients.
ROCHE : The World Health Organisation has asked Roche to deploy its stockpiles of antiviral drug Tamiflu
UBS asked a U.S. court on Thursday to reject demands by U.S. tax authorities for confidential information about its American clients,
saying disclosure would violate Switzerland's bank secrecy laws.
CREDIT SUISSE isn't facing a negative impact on results despite having granted a $900m loan to failed U.S. bank Thornburgh Mortgage
(Chapter 11) / CSG has already taken provisions and made write-downs on the loan
BALOISE said it plans to extend an ongoing share buyback by 12 months to April 30, 2010
VESTAS WIND may get an order worth at least NOK5bn from a wind farm in the U.S (Spokeman)
TNT : Q1 sales €2.44bn (2.5bn exp) / Ebit €163m (153m exp) / Kept earlier given outlooks

US APRIL LIGHT VEHICLE SALES (-34.3%) : VOLKSWAGEN –16.1% / MERCEDES –28.1% / FORD –31.3% / GM -33.2%

NEGATIVE IMPACTS
ALSTOM-SCHNEIDER : The French govt would be pushing Areva to sell its transmission & distribution ops (Les Echos). The operations
are worth between around €3 bn & €5 bn. Alstom has shown interest in buying the business. Schneider also might take a look
HEIDELBERGCEMENT : Philipp Daniel Merckle, son of late industrialist Adolf Merckle, told der Spiegel that the family empire his father
oversaw can no longer be held together…
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DANSKE BANK has no plans to sell its Swedish unit, CEO told Dagens Industri newspaper
FORTIS had the outlook on both its BB long-term and B short-term credit ratings raised to positive at S&P
RSA : ZURICH FINANCIAL : Andy Haste, CEO of RSA, has been approached to take over at ZURN (Sunday Telegraph)

US APRIL LIGHT VEHICLE SALES (-34.3%) : CHRYSLER -48.1% / TOYOTA -41.9% / BMW -38.4% / NISSAN -37.8% / VOLVO -
36.9% / PORSCHE -35.3%
BANK of AMERICA and CITIGROUP are working on plans to raise more than $10bn each in capital following preliminary findings of the
U.S. stress tests on banks (report) / The Federal Reserve will release "stress tests" results on Thursday

RESULTS DIVIDENDS EVENTS

Santander (€0,25737) / BASF (€1,95) / Beirsdorf
(€0,70 + 0,20) / Carrefour (€1.08) / Deutsche Tel
Today Acerinox / Alcatel Lucent / TNT Stress Test Results
(€0.78) / Inditex (€0.55) / Lagardere (€1.30) /
Schneider Electric (€3.45)
Adidas / Alstom / Beiersdorf / Hannover Re / Hypo Real
Tuesday Cap Gem (€1.00) / H&M (SEK 15.50)
Estate / Linde / Metro Group / UBS / Walt Disney
Total / Adecco / BMW / BNP Paribas / Carlsberg / Holcim / Antofagasta ($ 0.48 +0.056) / Baloise (CHF
Wednesday Italcementi / Lafarge / Cisco / Rhodia / Tenaris / Clariant / 4.50) / GDF Suez (€0.80+0.60) / Kingfisher (GBp E.On AGM
Delhaize / Deutsche Post / Prudential 3,777778)
Soc Gen / Swiss Re / Altana / Ciment Français / Deutsche
Thursday Axa (€0.40) / E.On (€1.50) / Technip (€1.20) Adidas AGM
Telekom / Unilever / Toyota
Adidas (€0.50) / HeidelbergCement (€0.12) /
Friday OMV / Puma Hochtief (€1.40) / Lanxess (€0.50) / Scania (SEK
2.50) / Yara (NOK 0.40)
TRADING IDEAS

BUY MUNICH RE / AXA / AEGON / NESTLE / L OREAL / VIVENDI on reversal Head & Shoulder possibility
BUY CARS asDAIMLER / RENAULT / PEUGEOT / VOLKSWAGEN & BUY OIL names as TOTAL / ENI / BP / ROYAL DUTCH on eco recovery
BUY PHILIPS / DANONE / UNILEVER looking good & BUY KPN / AHOLD / GSZ on double bottom possibility / BUY ROCHE on island reversal

BUY BAYER / SELL BASF // BUY TEF / SELL DTE // BUY SIEMENS / SELL ALSTOM // BUY L OREAL / SELL CARREFOUR // BUY MUNICH RE /
SELL AXA // BUY AHOLD / SELL METRO

BROKER METEOROLOGY

PLEASE FIND BELOW ON THE NEXT PAGE OUR MORNING ECO

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CHART OF THE DAY

U.S Auto Sales Total Annualized SA (million)
Since 2005

21

19

17

15

13

11

200 5 200 6 200 7 200 8 200 9

Source : Bloomberg

After increasing from 9.1 million in February to 9.9 million in March, U.S total vehicle sales dropped in April to reach 9.3 million .

ECONOMIC DATA
Time Country Indicator Period GE forecasts Consensus Previous
7.00 GMT Germany Retail sales March 0,2%,-0,3% YoY -0,2,-5,3% YoY
8.50 GMT France PMI Manufacturing (final) April 40,0 40,0
8.55 GMT Germany PMI Manufacturing (final) April 35,0 35,0
9.00 GMT Euro zone PMI Manufacturing (final) April 36,7 36,7
15.00 GMT United-States Pending home sales (MoM) March 0,0% MoM 2,1% MoM
15.00 GMT United-States Construction spending (MoM) March -1,7% MoM -0,9% MoM
18.00 GMT Italy Budget balance April - € 14,5 billion

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

DJIA 8212,4 1,69% - 6,43% EUR/USD 1,3319 2,16% -4,68%
S&P 500 877,5 1,33% - 2,85% EUR/JPY 132,49 -4,76% 4,34%
Nas daq 1719,2 1,49% 9,02% USD/JPY 99,48 -2,70% 8,87%
CA C 40 3159,9 5,21% - 1,81% Oil Price % 5 Days Ytd
DA X 4769,5 5,10% - 0,85% Brent $/b 52,9 3,89% 26,60%
Eur os tox x 50 2375,3 5,46% - 2,95% Gold Price % 5 Days Ytd
DJ 600 200,2 4,95% 0,94% Gold $/oz 892,3 -1,54% 1,19%
FTSE 100 4243,2 2,26% - 4,31% Rates USA Euro Japan
Nikkei 8977,4 1,47% 1,33% Central Banks* 0,25 1,25 0,10
Shanghai Comp 2538,3 0,56% 39,41% Overnight 0,20 0,43 0,10
Sens ex ( India) 11944,1 5,41% 23,81% 3 Months 0,14 0,75 0,20
MICEX ( Rus s ia) 920,4 - 0,84% 48,56% 10 Y ears** 3,15 3,17 1,40
Bov es pa ( Bras il) 47289,5 3,25% 25,94% *US: Fed Funds; Jap: Overnight; Euro: Ref i
** Euro: German Bund rate So urc e : B lo o m berg
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ECONOMIC DATA PREVIEW

Watch in the United-States the construction spending for March due at 15.00 GMT which are expected to decrease of 1.7% despite
the recent improvement in the real estate sector,

Watch in Germany the retail sales for March due as well at 7.00 GMT expected to increase since last month but should remain in
negative territory from a year ago./JB

ECONOMY
UNITED-STATES : ISM MANUFACTURING ROSE IN MARCH
The ISM factory index rose 40.1 in April , higher than forecast (38.4) from 36.3 in March. This increase was mainly led by the drop of
interest rates in the United-States and by the “Obama effect” through the budgetary revival plan. This index should continue to rise in the
coming month. Nevertheless the reading remained below 50 signalling that there is still a contraction of the activity.

UNITED STATES : FACTORY ORDERS DIP IN MARCH

Orders in place with U.S. factories fell more than forecast in March at - 0.9% (prior 0.7%). This drop of factory orders is the consequence
of the global economic downturn cutting demand for U.S. goods abroad despite the good resistance of domestic consumption . This
data showed us that despite the recent signs of improvement in the United-States ( reduction of the trade deficit, substantial growth of
the Conference Board index and good growth of 2.2% of the domestic consumption at the first quarter) the economy is getting better but
the global economic slowdown is still strongly affecting the country./JB
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VIX index : implied volatility on the S&P 500 $Libor - 3-Month(Interbank Rate)
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
04/05/2007 04/11/2007 04/05/2008 04/11/2008 04/05/2009 04/05/2007 04/11/2007 04/05/2008 04/11/2008 04/05/2009
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
04/05/2007 04/11/2007 04/05/2008 04/11/2008 04/05/2009 04/05/2007 04/11/2007 04/05/2008 04/11/2008 04/05/2009
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
80
1,4

70 1,35
60
1,3
50
40
1,25

30 1,2
04/05/2007 04/11/2007 04/05/2008 04/11/2008 04/05/2009 04/05/2007 04/11/2007 04/05/2008 04/11/2008 04/05/2009
Source : Bloomberg Source : Bloomberg
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