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** US MARKETS **
Dow 1,98%; Nasdaq 2,96%; S&P 2,16%; Soxx 3,99%; Russel2k 3,82%; DJAIG 1,46%;
10yr Bond 0,16%; 10yr Yield 5,17%; Crude future 73,72; Gold 601,75

| Materials 3,86%| Technology 2,68%| Energy 2,66%| Financials 2,19%| ConsDisc
2,11%| Industrials 2,03%| Healthcare 1,68%| ConsStaples 1,56%| Telecom 1,5%|
Utilities 1,27%

** US HEADLINES **
Stocks soared Thursday as investors rallied around the
idea that the Fed may finally take a breather after two years of interest-rate
increases.
- Fed, Looking for Guidance in Data, May Find Numbers Fail to Justify Pause
- General Motors Likely to Get U.S. Pension Waiver on GMAC Sale, People Say
- Personal Spending in U.S. Probably Ebbed in May, Price Pressures Mounted
- GM, Chrysler U.S. Sales Probably Dropped Most in June on Fewer Incentives
- Options Scandal Pushes Merrill, Citigroup Analysts to Uncover Next Probe
- Dollar Set for Quarterly Loss as Fed Near to End of Interest Rate Rises
- Calpine Bonds Rally on Rising Energy Prices, Six Months After Bankruptcy
- Treasuries Rise, Set for Winning Week, on Optimism Fed May Pause on Rates
- Pfizer to Visit Hundreds of Companies in $17 Billion Hunt for New Drugs

** US: IN PLAY TODAY **
- Research in Motion (+5.9% after hours) reported Q1 (May) earnings of $0.68 per
share, $0.04 better than the Reuters Estimates consensus and issued a in-line
guidance for Q2.

- Accenture (+3% after hours) Excluding non-recurring items, co reported Q3
(May) earnings of $0.50 per share, $0.04 better than the Reuters Estimates
consensus of $0.46. Revenues rose 6.8% year/year to $4.81 bln vs. the $4.43 bln
consensus.

- Apple (-2.8% after hours) announced that an internal investigation has
discovered irregularities related to the issuance of certain stock option grants
made between 1997 and 2001. One of the grants in question was to CEO Steve Jobs,
but it was subsequently cancelled and resulted in no financial gain to the CEO

- Palm (-9% after hours) Surpassing analysts’ expectations by six cents, Palm
reported Q4 (May) earnings of $0.29 per share, excluding non-recurring items.
Revenues rose 20.0% year/year to $403.1 mln vs. the $405.4 mln consensus. Co
issued downside guidance for Q1, sees EPS of 0.18-0.19 (consensus $0.22) on
revenues of $380-385 mln (consensus $412.40 mln).

- With the Feds focus still centered on “incoming” data and noting in its policy
directive today that “some inflation risks remain”, today’s Personal Income
and Spending data at 14:30 CET will be closely watched, with special emphasis
being placed on the core PCE deflator — a favored inflation measure among Fed
officials. With no notable earnings reports scheduled, other economic
data which could also impact trading include a revision to the University of
Michigan Sentiment at 15:50 CET and an update on regional manufacturing activity
when Chicago PMI hits the wires around 16:00 CET.

** ASIAN MARKETS **
Nikkei +2,43 Kospi +2,24 HSI +2,34 Taiwan +1,47 Thailand +1,98 Australia
+1,55%

** ASIAN HEADLINES **
- Japan’s Consumer Prices Rise the Most Since 1998, Supporting Rate Increase
- Veolia Agrees to Buy Brambles U.K. Trash Collection Unit for $1.1 Billion
- Asian Shares Rally as a Pause in U.S. Rate Increases Is Seen; Toyota Gains
- China Increases Electricity Prices to Compensate for Rising Cost of Coal
- Nomura Risks $148 Million Loss to Support Sale of Mitsubishi UFJ Shares
- Citigroup Had No Consent to Trade Patrick Stock, Australia Regulator Says
- China’s Yuan Rises to Highest Against U.S. Dollar Since July Revaluation
- Citigroup Chief Executive Prince Says He’s `Hopeful’ of Guangdong Purchase
- Shanghai Fake-Goods Market Closes as Lure of Property Offers Bigger Profit
- Taiwan Names New Finance Minister, Keeps Acting Bank Regulator in Place

** EUROPE: IN PLAY TODAY **

- Axa SA: Dolmea Real Estate SA, which was formed by
Europe’s second-largest insurer from some of its French
residential real-estate assets, scrapped its initial public
offering was to raise as much as 343 million euros the latest
victim of the decline in global stock markets.

- Berkeley Group Holdings Plc: The British builder
is scheduled to report preliminary fiscal full-year earnings.

- Mittal Steel Co.: The world’s largest steel company
is scheduled to hold an extraordinary shareholder meeting in
Rotterdam to discuss its proposed merger with Luxembourg’s
Arcelor SA.

- Siemens AG: Europe’s largest engineering company
will buy Bayer AG’s diagnostic division Bayer HealthCare for 4.2
billion euros. Bayer, which is buying rival Schering AG, expects
net proceeds of 3.6 billion euros from the sale.

- Telecom Italia SpA: Italy’s biggest telephone
company sold 57 properties to the Raissa fund for about 47
million euros, as part of a plan to cut debt by disposing of
assets.

** EUROPE: UPS & DOWNS **
+ CARREFOUR RAISED TO `NEUTRAL’ FROM `REDUCE’ AT UBS
+ HUNGARIAN STOCKS RAISED TO `OVERWEIGHT’ AT CREDIT SUISSE
+ HENNES & MAURITZ RAISED TO `NEUTRAL’ AT CREDIT SUISSE :HMB SS
+ Q-CELLS PRICE EST. RAISED 3.6% TO EU93.9 AT CREDIT SUISSE
+ DIAGEO FEB. 07 PRICE EST. RAISED TO 950P FROM 905P AT JPMORGAN
+ ENEL GIVEN NEW DEC. ‘06 PRICE ESTIMATE OF EU7.20 AT JPMORGAN

- EASYJET LOWERED TO `UNDERWEIGHT’ FROM `NEUTRAL’ AT HSBC
- CELESIO PRICE ESTIMATE LOWERED TO EU80 FROM EU86 AT UBS
- HANNOVER RE PRICE ESTIMATE CUT TO EU32 FROM EU35 AT UBS

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TOTAL FAILED TO MEET RECOMMENDATIONS FOR GAS USE, RUSSIA SAYS

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** US MARKETS **
Dow 0,45%; Nasdaq 0,55%; S&P 0,55%; Soxx -0,57%; Russel2k 0,16%; DJAIG 0,23%;
10yr Bond 0%; 10yr Yield 5,24%; Crude future 72,38; Gold 580,79

| Energy 1,97%| Telecom 0,6%| Technology 0,56%| Financials 0,48%| Utilities
0,45%| Industrials 0,38%| ConsStaples 0,35%| Healthcare 0,26%| Materials 0,21%|
ConsDisc 0,14%

** US HEADLINES **
- Americans Want Federal Reserve to Stop Raising Interest Rates, Poll Shows
- U.S. Economy Probably Expanded at 5.6 Percent Annual Rate in First Quarter
- Carlyle Doubles Size of New Japan Buyout Fund to $1.7 Billion, People Say
- Paulson Plays Safe on China, Tax Cuts, Deficits on Road to Treasury Post
- Convertible Bond Sales Almost Double on Rising Rates and Stock Volatility
- U.S. Senators Hatch, Specter Say More Hedge-Fund Oversight May Be Required
- Research In Motion, Palm May Say Sales Growth Slows as Competition Gains
- VCs, Gripped by Green Power Frenzy, Gamble on Solar, Biofuel Money-Losers

** US; IN PLAY TODAY **
- Micron Technology (-3.2% after hours) reported Q3 (May) earnings of $0.12 per
share, $0.04 better than the Reuters Estimates consensus of $0.08. Revenues rose
7.1% year/year to $1.31 bln vs. the $1.36 bln consensus. Gross margin increased
from 19% in Q2 to 25% in Q3 due to increases in DRAM pricing and production
shifts to higher margin products including CMOS image sensors. Imaging sales
grew to about 16% of net sales for 3Q06 as a result of strong customer demand
for Micron’s industry-leading Digital Clarity products.

Without question, the focal point Thursday will be the culmination of a two-day
FOMC meeting that is widely regarded to end with the overnight lending rate
being raised another 25 basis points to 5.25% at 20:15 CET. What is not a
foregone conclusion, however, is what the accompanying Fed policy directive will
imply about further rate hikes.

Notwithstanding the markets focus on the Fed, there are still some economic data
and a few earnings reports that will garner attention. At 14:30 CET, investors
will get a final read on Q1 GDP, Q1 Chain Deflator and Initial Claims. On the
earnings front, ATI Technologies (ATYT), General Mills (GIS), Monsanto (MON) and
Worthington (WOR) are scheduled to report before the bell while Accenture (ACN),
CA Inc. (CA), Constellation Brands (STZ), Palm Inc. (PALM) and Research In
Motion (RIMM) will report after the close.

** ASIAN MARKETS **
Nikkei 1,26%; Kospi 2,31%; HSI 0,93%; Taiwan 1,02%; China 1,84%; India 1,22%;
Thailand 0,84%; Australia 0,83%

** ASIAN HEADLINES **
- Japan’s Bond Trading Disrupted by Computer Malfunction at Biggest Broker
- Asian Stocks Rise on Signs Consumers Can Weather Higher Rates; Sony Gains
- Carlyle Doubles Size of New Japan Buyout Fund to $1.7 Billion, People Say
- India Economy Won’t Be Hurt by Rising Rates, Commerce Minister Nath Says
- Indonesia’s Kalbe May Buy Drug Developer, Health Brands, President Says
- Japan’s Industrial Production Falls More Than Expected, Led by Automakers
- BlueScope Steel Cuts Profit Estimate for Third Time This Year: Shares Fall
- China Studying Plan for Hong Kong to Sell Yuan Bonds, Jia Qinglin Says
- Zinifex, Asian Zinc Producers’ Shares Set to Rise Amid Metals-Market Slump
- Gold Rises in Asian Trading as Higher Oil Prices Spark Inflation Concern
- Crude Oil Trades Near Three-Week High on U.S. Gasoline Supply Concerns
- Copper in Shanghai Rises After London Stockpiles Decline to Six-Month Low

** EUROPE: IN PLAY TODAY **
- European Money Supply Growth will be reported at 10:00 CET in Germany today.

- BP Products North America, the U.S. unit of Europe’s largest oil company,
drove up the price of propane used to heat homes and businesses in the
northeastern U.S. in February 2004 and tried to do the same in April 2003,
according to the U.S. Justice Department and Commodity Futures Trading
Commission, which filed suit yesterday in federal court.

- French Interior Minister Nicolas Sarkozy, head of the majority UMP party, said
he backs a merger of Gaz de France and utility Suez SA to guarantee the
future for the gas company and repel a hostile takeover of the utility.

- L’Oreal SA: The world’s largest cosmetics maker said
it spent 1.25 billion euros ($1.6 billion) to repurchase 18.8
million shares, or 2.9 percent of the total, in the past year and
may buy back a similar amount in the next 12 months.

- Draka Holding NV: Europe’s third-largest cable
maker is scheduled to provide a trading update.

- EMI Group Plc: The world’s third-largest music
raised its offer for Warner Music Group to $4.6 billion
and rejected a counterbid from the U.S. company, intensifying a
six-year struggle to create the world’s second-largest record
label.

- European Aeronautic, Defence & Space Co.: The
parent company of Airbus SAS may be active. TAM SA,
Brazil’s biggest domestic airline, placed a firm order for 37
Airbus aircraft worth as much as $3 billion, part of an effort to
boost its fleet to meet rising demand.

- OAO Gazprom: The world’s largest natural gas
company and the Italian oil and gas company Eni SpA
discussed cooperating on developing new gas fields in countries
including Russia, Gazprom said in a statement after markets
closed.

- Q-Cells AG: The German solar-cell maker raised its
full-year profit forecast to 68 million euros from a prior
prediction of 65 million euros and increased its sales
expectation to about 500 million euros from 480 million euros, as
productivity improves.

- Tesco Plc: The share of the Britain’s biggest
supermarket in the U.K. grocery market reached a record in the
past month rising to 31.4 percent from 31.1 percent in the 12
weeks ended June 18, according to figures released today by
Taylor Nelson Sofres Plc.

- Vinci SA: The world’s biggest construction company
said it and a partner Consolidated Contractors Co. won a $115
million contract to build the Wadi Dayqah dams in Oman.

- Volkswagen AG: Audi AG, a division of the German
carmaker, aims for a higher return on equity than the 10 percent
targeted at the moment, Boersen-Zeitung said, citing an interview
with Chief Financial Officer Rupert Stadler.

** EUROPE: UPS & DOWNS **
+ BAYER PRICE ESTIMATE RAISED TO EU39 FROM EU32 AT ING
+ AEGON RAISED TO `BUY’ FROM `HOLD’ AT GILISSEN
+ DSM PRICE ESTIMATE RAISED TO EU47 AT ING
+ EMI PRICE ESTIMATE RAISED TO 300P FROM 260P AT MORGAN STANLEY
+ DELHAIZE PRICE ESTIMATE RAISED TO EU63.5 AT MORGAN STANLEY
+ DUKE ENERGY PRICE EST. RAISED 6.3% TO $34 AT LEHMAN
+ LADBROKES PRICE ESTIMATE RAISED TO 400P FROM MORGAN STANLEY
+ AGUAS DE BARCELONA PRICE TARGET RAISED 14.3% AT DEUTSCHE BANK
+ ASTRAZENECA RAISED TO `ADD’ FROM `SELL’ AT DRESDNER

- WIMPEY PRICE ESTIMATE LOWERED TO 500P FROM 530P AT UBS
- BOSTON SCIENTIFIC CUT TO `SELL’ VS. `HOLD’ AT CITIGROUP
- A.P. MOELLER CUT TO `NEUTRAL’ FROM `OVERWEIGHT’ AT HSBC
- HANNOVER RE PRICE TARGET CUT 2% TO EU29.9 AT DEUTSCHE BANK
- EADS PRICE ESTIMATE CUT 23% TO EU24 AT JPMORGAN
- TUI PRICE ESTIMATE LOWERED TO EU15.2 FROM EU16.5 AT DEUTSCHE
- BAE SYSTEMS PRICE ESTIMATE LOWERED TO 430P FROM 450P AT LEHMAN

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** US MARKETS **
Dow -1,09%; Nasdaq -1,57%; S&P -0,91%; Soxx -3,75%; Russel2k -1,67%; DJAIG
-0,2%; 10yr Bond 0,03%; 10yr Yield 5,2%; Crude future 72,17; Gold 582,55

| Energy 0,51%| Telecom -0,3%| Utilities -0,42%| ConsStaples -0,46%| Financials
-0,98%| Industrials -1,06%| Healthcare -1,3%| ConsDisc -1,31%| Materials -1,34%|
Technology -1,47%

** US HEADLINES **
- GM Counts on Generic Drug to Help Cut $200 Million Annual Cholesterol Bill
- Bernanke’s Early Stumbles Strengthen His Case for Setting Inflation Target
- Home Sellers Cut Prices, Add Lures as Once-Hot U.S. Market Turns Chilly
- FCC’s Martin Seeks Local Sports Concessions on Adelphia Sale, People Say
- Stocks Fall Worldwide in Quarter as Interest Rates Rise; More Losses Seen
- Allstate, Axis, Ace Borrowing Costs Increase as Hurricane Season Begins
- Dollar May Strengthen as Reports Signal Economy Can Withstand Higher Rates
- News Corp. May Make Second Bid for Hong Kong Phone Assets, Australian Says
- GE, HBOS Waive Fees, Cut Interest Rates to Sell Australians Credit Cards

** US: IN PLAY TODAY **

- Nike (-1.6% after hours) said 4Q/May EPS ex-item was $1.39 ($1.40 expected) on
revenue up 7.6% YoY of $4.01bln ($3.97bln). Expects 1Q gross margin to fall
more than one point and sales to rise in high single digit.

- Wells Fargo announced two-for-one stock split, increased 7.7% its quarterly
dividend and boosted its share buyback program.

- MBA Mortgage Applications are reported at 13:00 CET. From the earnings front
we’ll see reports from Paychex and Micron Technology.

** ASIAN MARKETS **
Nikkei -1,94%; Kospi -1%; HSI -0,47%; Taiwan -0,48%; China -0,29%; India -0,95%;
Thailand 0,38%; Australia -0,97%

** ASIAN HEADLINES **
- Asian Stocks Slide Most in Two Weeks on Rate Concern; Honda, Samsung Drop
- China Life Acquires 12 Percent Stake in Citic Securities for $406 Million
- Malaysian Airline to Get $231 Million From Government to Pay for Job Cuts
- News Corp. May Make Second Bid for Hong Kong Phone Assets, Australian Says
- Origin Energy Abandons Plan to Merge With Contact, Citing Lack of Support
- Baidu Plans Web Log Service in China to Increase Its Number of Subscribers
- Australian Government Won’t Discuss Pricing of LNG With China, Howard Says
- Bank of China Draws $84 Billion of Bids in Nation’s Largest Domestic IPO
- Karachi Stock Exchange to Open Three Overseas Branches by 2010, Chief Says
- Copper Futures Drop After Report Shows China’s First-Quarter Demand Fell
- Gold Gains In Asia Amid Speculation Fed May Be Nearing End of Rate Rises

** EUROPEAN MARKETS **
S&P future 0,03%; Bund future -0,03%; Crude future 72,17; €/$ 1,25725; Gold
582,55

** EUROPE: IN PLAY TODAY**

- DaimlerChrysler’s CEO said that its Mercedes unit is well on its way to
posting a 7% return on sales in 2007 (WSJ).

- Linde will have to delay the sale of its forklift unit until autumn due to
Credit Suisse, the manager of the sale, having difficulties showcasing the
transparency of the division as it consists of 3 different forklift producers
(Die Welt).

- Warner Music Group has offered 320p per share for British rival EMI Group,
valuing the company at £2.5bln, after it turned down a $4.23bln offer from EMI
back in May (FT).

- Autogrill agreed to buy Belgium-based Carestel Group for about E53m in bid to
boost its revenue from airports.

- Novartis won US approval to sell Exelon, the first drug aimed at treating
dementia in patients with Parkinson’s disease.

- Roche’s President declared the group was at a start of a strong and
sustainable phase of development (Finanz & Wirtschaft).

- Ericsson had its credit rating raised to Baa2 from Baa3 by Moody’s Investors
Service as it expects strong growth in the industry.

** EUROPE: UPS & DOWNS **

+ MERRILL LYNCH RAISES OIL PRICE FORECAST FROM $47 TO $65/BBL FOR 2007
+ MERRILL LYNCH RAISES OIL PRICE FORECAST FROM $59 TO 67.50/BBL FOR 2006
+ SCHNEIDER ELECTRIC RAISED TO `BUY’ FROM `HOLD’ AT CITIGROUP
+ TULLOW OIL PRICE ESTIMATE RAISED TO 450P FROM 380P AT MERRILL
+ DANA PETROLEUM PRICE EST. RAISED TO 1560P VS 1350P AT MERRILL
+ MONTE PASCHI PRICE EST. RAISED TO EU4.78 FROM EU4.4 AT LEHMAN
- VOSSLOH LOWERED TO `NEUTRAL’ FROM `OVERWEIGHT’ AT HSBC
- ATOS ORIGIN CUT TO `UNDERPERFORM’ AT CREDIT SUISSE
- SABMILLER PRICE ESTIMATE CUT TO 980P FROM 1060P AT LEHMAN

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