** EU WRAP **

** EUROPEAN MARKETS **
S&P future 0.02%; Bund future 0.05%; Crude future 70.29; €/$ 1.269385; Gold
678.75

** HEADLINES **
- EU Finance Chiefs Say Economy Can Withstand Rising Rates, Record Oil Price
- Euro Heads for Fourth Week of Gains as ECB Likely to Raise Interest Rates
- SNS Reaal Plans to Raise as Much as $1.65 Billion, Challenge ING, Aegon
- Crude Oil May Fall as U.S. Refiners Bolster Gasoline Output, Survey Shows
- Gold Futures Exceed $680 an Ounce on Inflation Hedge, Iran Nuclear Dispute
- EU Must Consider Windfall Tax on Oil Companies, Luxembourg’s Juncker Says
- PPR’s Redcats Mail-Order Unit to Buy Sportsman’s Guide for $265 Million

** IN PLAY TODAY **

- Sanofi-Aventis posted a 54% rise in 1Q net income to E2.17bln (E1.94bln
expected). The group reaffirmed its FY EPS growth around 10%. Plavix 1Q sales
rose 21% to E580m, Ambien 1Q sales rose 12% to E441m and Lovenox 1Q sales 16% to
E624m YoY. The drugmaker will start selling its Plavix drug in Japan by the end
of the month.

- Michelin’s BBB+ long-term credit rating may be cut by S&P’s due to the
weakness of some markets and rising raw-material and energy costs.

- Volkswagen wants to restructure its German plants in bid to lower costs and
has already begun negotiations with worker representatives (FTD).

- Hypo Real Estate 1Q net income rose 24.7% to E86m (E97m expected). The company
reaffirmed its FY forecast, with FY pretax profit rising by as much as 20% to
reach at least E530m.

- Continental could exit the US market if profitability failed to increase in
the region (Die Welt citing the group’s CFO).

- Royal Dutch Shell announced that output at its Mars platform in the Gulf of
Mexico, which closed down in the wake of Katrina, may exceed pre-hurricane
production levels as a result of the improvements made while it was closed.

- VNU announced that a buyout group led by Blackstone Group and Kohlberg Kravis
& Co raised its offer by E0.75 to E29.50 a share.

- Solvay won a 5-year contract from the US Department of Health & Human Services
to develop influenza vaccines.

** UPS & DOWNS **

+ DEUTSCHE BANK PRICE EST. RAISED TO EU115 AT MORGAN STANLEY
+ MAN AG PRICE EST. RAISED TO EU68 FROM EU55 AT JPMORGAN
+ UBS PRICE ESTIMATE RAISED TO SF165 FROM SF157 AT CITIGROUP
+ MAN AG PRICE EST. RAISED TO EU73 FROM EU60 AT CITIGROUP
+ TELENOR PRICE ESTIMATE RAISED TO NK100 FROM NK76 AT LEHMAN
+ MAN AG PRICE EST. RAISED TO EU72 FROM EU65 AT CREDIT SUISSE
+ GLAXOSMITHKLINE PRICE EST. RAISED TO 1699P VS 1480P AT HSBC
+ BASF PRICE ESTIMATE RAISED TO EU77 FROM EU70 AT DEUTSCHE
+ BARCLAYS PRICE ESTIMATE RAISED TO 850P AT MERRILL LYNCH

- CONTINENTAL CUT TO `NEUTRAL’ VS `OUTPERFORM’ AT CREDIT SUISSE
- VEDIOR CUT TO `NEUTRAL’ VS `OUTPERFORM’ AT CREDIT SUISSE
- NORSK HYDRO CUT TO `SELL’ FROM `HOLD’ AT CITIGROUP