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** HEADLINES **
- European Executive, Consumer Confidence May Have Remained Near 5-Year High
- French Jobless Rate Fell to 9.5 Percent in March, More Than Three-Year Low
- Billionaire Azevedo Defies EU Snub, Hunts Portugal’s Former Phone Monopoly
- Yen Drops Versus Dollar as Japan’s Takenaka and Abe Say Deflation Persists
- Oil Falls for Fifth Day as Refiners Make More Fuel, Easing Supply Concern
- Retail Sales in Eastern European Countries to Grow `Strongly,’ Mintel Says
- Roche, Drugmakers Shares Soar as Bird Flu Poses Threat to North America

** IN PLAY TODAY **

- Earnings of note: Novo Nordisk, DSM, Volkswagen, Erste Bank, Banco Santander and Puma.

- Areva SA ,The world’s largest builder of nuclear
reactors said first-quarter sales rose 13 percent to 2.48
billion euros as it worked on constructing Finland’s fifth power
station.

- Compagnie de Saint-Gobain SA, Europe’s biggest
distributor of building materials said first-quarter sales rose
28 percent to 9.75 billion euros, aided by the acquisition of
BPB Plc. Revenue growth would have been 9.1 percent before the
acquisition of the gypsum maker and the effects of currency
fluctuations it said.

- PSA Peugeot-Citroen, Europe’s second-largest
automaker said first-quarter sales rose 2.4 percent to 14
billion euros thanks to gains at its parts division Faurecia and
its freight unit Gefco. Peugeot reiterated a forecast for the
2006 operating margin at about 2.8 percent of sales in the first
half, after which it expects it will rise as it sells a new
model of the 207 car.

- Telefonica SA, Spain’s largest telephone company,
selling its 60 percent stake in phone director unit Telefonica Publicidad
e Informacion SA to Yell Group Plc for 3.07 billion euro.

- Erste Bank AG, Austria’s second- biggest bank, said first-quarter
profit jumped on lending in eastern Europe and better-than-expected
earnings from its stock and foreign currency trading business.
Net income rose 50 percent to 239.6 million euros ($300
million), or 83 cents a share, from 160 million euros, or 67 cents,
a year earlier, Vienna-based Erste said today. That beat analysts’
207 million-euro median estimate. Erste said profit in 2006 will
grow by “more than” 20 percent.

- Novo Nordisk A/S, the world’s largest maker of insulin, said first-quarter profit fell after it didn’t
repeat a gain from the sale of shares of Ferrosan A/S. Net income fell to 1.21 billion kroner ($200 million), or 3.72 kroner a share, from 1.23 billion kroner, or 3.70 kroner, a
year earlier, Bagsvaerd, Denmark-based Novo said in a statement on
Stockwise today. Novo was expected to earn 1.33 billion kroner,
the median estimate of 11 analysts surveyed by RB-Boersen.

- Puma AG, Europe’s second-largest sporting-goods maker, said first-quarter profit unexpectedly
rose and increased its annual forecasts for the second time in as many months ahead of this year’s World Cup soccer tournament. First-quarter net income increased 2.5 percent to 93 million
euros, Puma said today in a statement. Analysts had expected profit to drop to 85 million euros, according to a Bloomberg survey. Earnings will fall less than 10 percent this year, the company said. Puma, based in the German town of Herzogenaurach, previously forecast a decline of 10 percent to 15 percent.

** UPS & DOWNS **

+ SINGAPORE STOCKS RAISED TO `OVERWEIGHT’ BY MERRILL LYNCH
+ VOLVO RAISED TO `HOLD’ FROM `SELL’ AT CITIGROUP
+ PEUGEOT PRICE ESTIMATE RAISED TO EU53 FROM EU46 AT LEHMAN
+ GLAXOSMITHKLINE PRICE EST. RAISED TO 1707P VS 1655P AT MERRILL
+ SAINT GOBAIN PRICE ESTIMATE RAISED TO EU62 FROM EU58 AT UBS
+ LONMIN RAISED TO `BUY’ FROM `NEUTRAL’ AT UBS
+ ASTRAZENECA PRICE ESTIMATE RAISED TO 3200P FROM 3000P AT UBS
+ ABB PRICE EST. RAISED 20% TO SF17.85 AT JPMORGAN
+ RANDSTAD PRICE EST. RAISED 8% TO EU52.50 AT MORGAN STANLEY
+ GLAXO RAISED TO `OVERWEIGHT’ AT MORGAN STANLEY :GSK LN

- OUTOKUMPU CUT TO `UNDERWEIGHT’ VS. `NEUTRAL’ AT JPMORGAN
- MERRILL LYNCH TURNS LESS POSITIVE ON PAKISTAN STOCKS
- JCDECAUX CUT TO `IN-LINE’ FROM `OUTPERFORM’ AT GOLDMAN SACHS
- SMITH & NEPHEW LOWERED TO `EQUAL-WEIGHT’ AT MORGAN STANLEY

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** TRADING HEADLINES **
- Bernanke Says Fed May Pause in Rate Increases Even If Risks Not Balanced
- Treasury 2-Year Notes Rise Most in Six Weeks on Expectations for Fed Pause
- U.S. Stocks Advance on Bernanke Comments; Shares of Banks, Utilities Climb
- Dollar Weakens After Bernanke Says Central Bank May Suspend Rate Increases
- China May Take Further Steps to Cool Economy After Raising Interest Rates

** FED PAUSE **
Federal Reserve Chairman Ben S. Bernanke gave his strongest signal yet that the central bank may
pause in its cycle of interest rate increases. “Even if in the committee’s judgment the risks to its
objectives are not entirely balanced, at some point in the future the committee may decide to take no action at one or more meetings in the interest of allowing more time to receive information relevant to the outlook,” Bernanke said. The Fed’s Open Market Committee is now basing deliberations
on what incoming data say about their forecast of a slower economic expansion in the second half of 2006. A continuing surge in growth may spur the central bank to keep lifting rates after 15 consecutive increases in almost two years.

** AFTER HOURS **
- Missing analysts’ expectations by a penny, Microsoft (-6.4% after hours) reported Q3
earnings of $0.32 per share, excluding $0.03 legal charge. Revenues rose 13.3%
year/year to $10.9 bln, which was also shy of expectations (consensus $11.04
bln). Looking ahead, MSFT issued downside EPS guidance for Q4, sees EPS of $0.30
(consensus $0.34) on revenues of $11.5-11.7 bln (consensus $11.67 bln). Co also
issued downside EPS guidance for FY07, sees EPS of $1.36-1.41 (consensus $1.53)
on revenues of $49.5-50.5 bln (consensus $49.52 bln). Microsoft CFO said, “We
are now accelerating our investments in the business to drive future growth,
which is reflected in our financial guidance. We believe next fiscal year will
deliver even stronger double-digit revenue growth than this year.”

** IN PLAY TODAY **
On the economic front, investors will get an advanced read on Q1 GDP, its
accompanying chain deflator figure and the Q1 Employment Cost Index at 14:30 CET.
Michigan Sentiment Chicago PMI hit the wires at 15:45 and 16:00 CET.

Chevron (CVX) will head a list of notable names reporting results before the bell which also includes ArvinMeritor (ARM), Automatic Data Processing (ADP), Cummins (CMI), Fortune Brands (FO), ITT
Industries (ITT) and Snap-On (SNA).

** ASIAN HEADLINES **
- China May Take Further Steps to Cool Economy After Raising Interest Rates
- Bank of Japan Leaves Key Interest Rate Near Zero; Consumer Prices Climb
- Asian Stocks Have Steepest Slide in Two Weeks on China Rates; Sony Slumps
- E.Land Buys Carrefour’s South Korea Discount Store Chain for $1.9 Billion
- Nippon Steel Says Full Year Net Income to Fall 19 Percent on Competition
- Sony Shares Head for Biggest Drop in Three Years as Forecasts Fall Short
- Honda Plans to Increase Spending in Japan to Boost Domestic Vehicle Sales
- Chinese Debt Will Underperform on Higher Interest Rates, Citigroup Says

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[Dow Jones] Electricity utilities slide on news several EU
countries including France, Netherlands, Czech Republic and Estonia produced
less CO2 emissions than expected in 05, a utility analyst says. British Energy
(BGY.LN) ends -4.6% to 698p because it is a “pure beneficiary of higher CO2
prices” given that it is primarily a nuclear power company. RWE (RWE.XE) -2.7%
to EUR70.4 due to fact that portfolio is heavily nuclear weighted, analyst
says. Drax (DRX.LN) -1.6% to 795.5p due to fact that lower CO2 prices results
in lower power prices and therefore lower profitability for the coal-fired
power generator, analyst adds. (JAM)

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+6.1% (+1.8% exp). Ex transport +2.8% (exp +1%)

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** EUROPEAN MARKETS **
S&P future 0,03%; Bund future 0,1%; Crude future 72,99; €/$ 1,2425; Gold 631,62

** IN PLAY TODAY **

- Earnings of note: AbnAmro, Randstad, Infineon, Linde and Stork

- Infineon Technologies AG, Europe’s second-largest maker of semiconductors,
reported the smallest loss in five quarters as the company sold more chips used
in cars and personal computers. The loss in the three months ending in March was
26 million euros ($32.3 million), or 3 cents a share, the Munich-based company
said in an e-mailed statement today. Infineon lost 114 million euros, or 15
cents a share, a year earlier. Sales rose to 1.99 billion euros from 1.61
billion euros.

- ABN Amro Holding NV, the largest Dutch bank, said first-quarter profit rose a
less-than-expected 12 percent and announced plans to eliminate 2,400 jobs in its
three main markets as it moves back-office work to India. First-quarter net
income rose to 1 billion euros ($1.2 billion) from 895 million euros, The latest
job cuts, about 2.4 percent of ABN Amro’s workforce, bring to 5,900 the job
reductions the bank has announced since 2004.

- Roche Holding AG, the world’s biggest maker of cancer medicines, said
first-quarter sales rose 22 percent, boosted by demand for the colon-cancer drug
Avastin and the flu treatment Tamiflu.

- STMicroelectronics NV, Europe’s largest semiconductor maker, said
second-quarter revenue may rise as much as 18 percent from a year earlier as it
sells more of the chips that allow mobile telephones to show videos and play
music. Sales may reach $2.41 billion to $2.55 billion, compared with $2.16
billion in the year-earlier period, STMicroelectronics said in a statement late
yesterday. Gross margin is likely to reach 35.8 percent, plus or minus 1
percentage point. The company said first-quarter sales rose 13 percent to $2.36
billion.

- Dutch temporary staffing company Randstad NV Wednesday reported a 74% rise in
first-quarter net profit, helped by a recovery in demand in Germany and the
Netherlands, its major markets. The company said net profit for the three months
was EUR48.1 million, up from EUR27.7 million a year earlier. The result was
slightly below analyst expectations of EUR50.7 million.

** UPS & DOWNS **

+ KUEHNE & NAGEL PRICE ESTIMATE RAISED TO SF490 VS SF425 AT UBS
+ U.S. STEEL RAISED TO `BUY’ FROM `NEUTRAL’ AT UBS
+ TESCO PRICE ESTIMATE RAISED TO 365P FROM 335P AT LEHMAN
+ ENAGAS PRICE EST. RAISED TO EU19.5 FROM EU18.5 AT LEHMAN
+ TOMTOM PRICE EST. RAISED TO EU38 FROM EU34 AT MORGAN STANLEY
+ VOLVO PRICE EST. RAISED TO SK320 FROM SK285 AT MORGAN STANLEY
+ VOLVO PRICE EST. RAISED TO SK373 FROM SK355 AT JPMORGAN
+ JULIUS BAER PRICE EST. RAISED TO SF132 FROM SF126 AT MERRILL
+ RICHEMONT RAISED TO `BUY’ FROM `HOLD’ AT DEUTSCHE BANK
+ SAP PRICE ESTIMATE RAISED TO EU175.5 VS EU174 AT ING
+ LAFARGE PRICE ESTIMATE RAISED TO EU115 FROM EU95 AT DEUTSCHE

- ANGLO AMERICAN CUT TO `HOLD’ FROM `BUY’ ABN AMRO
- TELEFONICA PRICE ESTIMATE CUT 15% TO EU14 AT DRESDNER
- TELEFONICA CUT TO `HOLD’ FROM `BUY’ AT DRESDNER
- AUTOSTRADE CUT TO `NEUTRAL’ FROM `BUY’ AT UBS
- FRANCE TELECOM PRICE ESTIMATE CUT TO EU20.5 FROM EU21.2 AT UBS

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** US MARKETS **
Dow -0,47%; Nasdaq -0,13%; S&P -0,49%; Soxx 0,28%; Russel2k -0,17%; DJAIG 0,58%;
10yr Bond 0,01%; 10yr Yield 5,07%; Crude future 72,99; Gold 631,62

| Telecom 0,49%| ConsStaples 0,11%| ConsDisc -0,05%| Technology -0,1%|
Financials -0,59%| Materials -0,6%| Healthcare -0,66%| Industrials -0,95%|
Energy -1,09%| Utilities -1,33%

** HEADLINES **
- Bernanke, Seeking Greater Openness, Nudges Fed to Review Communications
- Amazon.com Shares May Rise After Retailer Increases This Year’s Forecasts
- Treasuries May Fall; Reports to Suggest Economy Resiliant to Higher Rates
- About 7 Million Americans Ages 50 to 64 Lack Health Insurance, Study Says
- Dollar Rises on Speculation U.S. Reports Will Signal Growth, Higher Rates
- Silver Gains After BHP Billiton Says Output to Be Cut at Australian Mine
- Crude Oil Falls for a Third Day as Bush Moves to End Gasoline Disruption

** AFTER HOURS **
- Amazon.com (+0.5% after hours) reported Q1 (Mar) earnings of $0.12 per share,
excluding non-recurring items, in line with the Reuters Estimates consensus.
Revenues rose 19.8% year/year to $2.28 bln (consensus $2.23 bln). Co issued
in-line guidance, sees Q2 revenues of $2.03-2.18 bln (consensus $2.08 bln) and
FY06 revenues of $9.95-10.5 bln, down from previous co guidance of $9.85-10.45
bln (consensus $10.06 bln).

** IN PLAY TODAY **
On the economic front Wednesday, Durable Orders will be out 14:30 CET while New
Home Sales are scheduled for a 16:00 CET release. About a half hour later, the
Energy Dept will release its weekly oil inventory report while the 20:00 CET
release of the Fed’s Beige Book could influence afternoon trading.

Dow component Boeing (BA) will head a list of notable names before the bell
which also includes Amerada Hess (AHC), AmerisourceBergen (ABC), Biogen Idec
(BIIB), Colgate-Palmolive (CL), ConocoPhillips (COP), Exelon (EXC), Norfolk
Southern (NSC), Office Depot (ODP), PepsiCo (PEP), Sprint Nextel (S), WellPoint
(WLP) and Weyerhaeuser (WY). Anheuser-Busch (BUD) will report earnings
during market hours while Avaya (AV), Cendant (CD), Express Scripts (ESRX),
Fidelity National (FNF), and Pulte Homes (PHM) are a few noteworthy companies
scheduled to report after the close.

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Consumer Confidence 109.6 vs survey 106.2
Existing Home Sales 6.92m vs survey 6.66m

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Alcatel under pressure following Lucent numbers, which appear a bit light.

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