** MORNING WRAP **

** US MARKETS **
Dow 1,03%; Nasdaq 0,65%; S&P 0,52%; Soxx 1,37%; Russel2k 0,65%; DJAIG 0,33%;
10yr Bond 0,06%; 10yr Yield 5,06%; Crude future 69,52; Gold 566

| Energy 2,38%| Materials 1,59%| Technology 1,04%| Industrials 0,94%| ConsDisc
0,57%| ConsStaples 0,41%| Healthcare 0,24%| Telecom 0,18%| Utilities -0,59%|
Financials -0,6%

** US HEADLINES **
- U.S. Stocks Rebound From 7Month Lows on Boeing, Overcoming CPI Report
- Industrial Production in U.S. Probably Slowed Last Month as Demand Cooled
- Treasuries May Decline; Traders Raise Bets on Two More Fed Rate Increases
- Pacific Ethanol, VeraSun Expansions May Create Fuel Surplus, Hurt Profits
- Dollar May Fall as Reports to Show Rate Increases Slowing Manufacturing
- Floating-Rate Note Sales Hit Record in Europe on Concern Over Rising Rates

** US: IN PLAY TODAY **
14:30 CET: Jobless Claims and Empire Manufacturing
15:00 CET: Net Foreign Securities Purchases
15:15 CET: Industrial Production & Capacity Utilisation
18:00 CET: Philadelphia Fed

Bear Stearns reporting before the U.S. markets open, Adobe reports Q2 earnings
after market.

** ASIAN MARKETS **
Nikkei 1,13%; Kospi 0,23%; HSI 0,77%; Taiwan -0,66%; China 0,66%; India 3,64%;
Thailand -1,03%; Australia 0,33%

** ASIAN HEADLINES **
- China Acts to Cool Economy as Report Shows Accelerating Investment Growth
- Cnooc’s Shares Jump on Husky’s `Significant’ Gas Find in South China Sea
- Asian Stocks Gain as BHP, Mitsubishi UFJ Rise on Brokerage Recommendations
- Bank of Japan Leaves Interest Rates Near Zero After Global Equities Drop
- Singapore Adds Most Jobs Since 1995, Beating Estimates, as Economy Expands
- Fujimaki, Former George Soros Adviser, Forecasts Yen to Decline to 140
- Japanese Shares Will Rebound as Growth Boosts Earnings, Hedge Funds Say
- India’s Jewelers Turn to Bollywood to Overtake Italy, Belgium in Exports

** EUROPEAN MARKETS **
S&P future 0,2%; Bund future -0,16%; Crude future 69,52; €/$ 1,26145; Gold 566

** EUROPE: IN PLAY TODAY **

- S&P and Moody’s cut their outlook to negative from stable on EADS following
yesterday’s announcement of the delay in the delivery of the A380 superjumbo.
EADS’ target price was cut to E30 from E40 by UBS. In other news, Air China
ordered 24 Airbus A320 for about $1.74bln to be delivered between 2007 and 2010.

Veolia Environnement is considering a bid for Vinci. Vinci announced it has
“no strategic interest” in combining businesses with Veolia and would consider
any bid as “hostile”.

- Vivendi is targeting mobile-phone game sales of $200m in Western markets in
2009, a market which will grow by 30-35% a year through to 2010. The company
reiterated an outlook for Vivendi Games’ sales to rise 12-15% in 2006.

- Suez’s CEO announced his company will be ready to listen to Enel’s proposals
after it completes its merger with Gaz De France, on possible developments in
different regions of Europe (Les Echos). Suez raised to “buy” from” hold” by
Deutsche Bank.

- Volkswagen said it might shut down a plant in Brazil if it fails to reach an
accord with workers to reduce payroll costs in the country by 2008.

- RWE said fire damage at its Niederaussen coal power plant in the western part
of the country was less than expected.

- DaimlerChrysler’s Chrysler unit will start a marketing campaign which will
highlight its close ties to the Mercedes-Benz brand in order to boost flagging
sales. DaimlerChrysler target price cut to E55 from E59 by Deutsche Bank.

- Macquarie Bank and 3i Group announced they were considering making a
counter-bid in cash bid for Associated British Ports Holdings, after it earlier
accepted a £2.5bln bid by Goldman Sachs Group and partners. Goldman consequently
raised its offer for AB Ports to GBp 840/share.

- Nuon and Essent are preparing to merge to prevent any takeover by foreign
rivals such as RWE or Suez (Die Welt).

- Stork announced that the delay in the delivery of the Airbus’ A380 superjumbo
will result in lower sales at the company.

** EUROPE: UPS & DOWNS **
+ NESTLE RAISED TO `OVERWEIGHT’ AT MORGAN STANLEY
+ KUEHNE & NAGEL RAISED TO `OVERWEIGHT’ VS `NEUTRAL’ AT HSBC
+ VOESTALPINE RAISED TO `OUTPERFORM’ FROM `IN-LINE’ AT GOLDMAN
+ ALLIED IRISH BANKS RAISED TO `BUY’ FROM `HOLD’ AT DEUTSCHE
+ SUEZ RAISED TO `BUY’ FROM `HOLD’ AT DEUTSCHE BANK
- ZURICH FINANCIAL PRICE EST. CUT 6.4% AT MORGAN STANLEY
- PHILIPS PRICE ESTIMATE LOWERED TO EU29 FROM EU30 AT MERRILL
- FRANCE TELECOM PRICE ESTIMATE CUT 13% TO EU18.5 AT JPMORGAN
- FRANCE TELECOM CUT TO `UNDERWEIGHT’ VS. `NEUTRAL’ AT JPMORGAN
- DAIMLERCHRYSLER PRICE EST. CUT TO EU55 VS EU59 AT DEUTSCHE
- BUHRMANN PRICE ESTIMATE LOWERED TO EU11.5 FROM EU15 AT UBS
- ERSTE BANK PRICE ESTIMATE LOWERED TO EU47 FROM EU55 AT UBS