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** US MARKETS **
Dow -0,03%; Nasdaq 0,56%; S&P 0,04%; Soxx 1,13%; Russel2k 0,59%; DJAIG -1,49%;
10yr Bond 0,01%; 10yr Yield 4,67%; Crude future 58,32; Gold 602,13

| Technology 0,79%| ConsDisc 0,59%| Industrials 0,44%| Materials 0,36%|
Financials 0,29%| Utilities 0,03%| ConsStaples -0,17%| Healthcare -0,47%|
Telecom -1,33%| Energy -1,47%

- Oil Trades Below $59 a Barrel After Plunging on Forecast Warm U.S. Weather

- Procter &Gamble (PG) — this week’s last Dow component scheduled to
report results — heads the list of earners. Other notable names out before the
bell include Alcan (AL), Automatic Data Processing (ADP), Biogen Idec (BIIB),
Eastman Kodak (EK), Hilton Hotels (HLT), InterActive (IACI), Masco (MAS), Molson
Coors (TAP), Qwest (Q), Royal Caribbean (RCL), U.S. Steel (X), Valero Energy
(VLO), and BJ Services (BJS). After the close, Chipotle Mexican Grill (CMG),
McKesson (MCK), Papa John’s (PZZA) are among the bigger names reporting.

- On the economic front, the Q3 Employment Cost Index will be released at 14:30
CET while Chicago PMI and Consumer Confidence will be out at 16:00 CET.

** ASIAN MARKETS **
Nikkei 0,29%; Kospi 0,62%; HSI -0,22%; Taiwan 0,37%; China 1,39%; India 0,02%;
Thailand 0,66%; Australia -0,28%

- India Raises Benchmark Rate for Fourth Time This Year to Curb Inflation
- Bank of Japan Predicts Inflation Will Accelerate, Supporting Rate Increase
- Asian Stocks Decline, Led by PetroChina, as Oil Drops; LG.Philips Advances
- Japan Household Spending Falls the Most in Five Years, Wage Growth Stalls
- Sinopec Profit Rises 51 Percent on Increased Output to Meet China’s Demand
- Global Iron Ore Prices May Fall as Supply Improves, China Steel Group Says
- Creative, Losing Share to IPods, Reports $21 Million Loss; Shares Tumble
- Carlyle, Unison to Lead $776 Million Management Buyout of Toshiba Ceramics
- Denso Raises Profit Forecast on Demand for Parts From Shareholder Toyota
- Indian Oilseed Output May Decline on Dry Weather, Boosting Palm Oil Prices

- The yen headed for the first monthly gain against the dollar since May as the
Bank of Japan said in its semi-annual outlook report today inflation will
accelerate. Japan’s currency reversed a decline today as a twice-yearly
report signaled the central bank’s plans to raise interest rates in coming
months. Governor Toshihiko Fukui has said he can’t rule out another increase
this year because holding borrowing costs too low may fuel excessive investment.

** EUROPE: IN PLAY TODAY **

- UBS AG, Europe’s biggest bank by assets, reported a 21 percent drop in
third-quarter profit as lower trading revenue hurt earnings at the investment
bank. Net income fell to 2.2 billion Swiss francs ($1.76 billion),or 1.07 francs
a shares, from 2.77 billion francs, or 1.23 francs, a year earlier. That fell
short of the 2.61 billion-franc median estimate of 17 analysts surveyed by
Bloomberg News.

- Sanofi-Aventis SA, France’s biggest drugmaker, reported a 12 percent drop in
third-quarter profit after a generic of its blood-thinner Plavix snatched
revenue and health-policy changes eroded sales in its home market. Net income
fell to 1.7 billion euros ($2.16 billion), or 1.26 euros a share, from 1.92
billion euros, or 1.44 euros. That beat the 1.59 billion euros analysts
estimated in a Bloomberg survey.

- Atos Origin SA, the supplier of computer services to the Olympic Games, cut
its outlook for full-year sales growth, after third-quarter revenue fell 1.3
percent because of a decline in the U.K. Atos expects 2006 revenue excluding the
effect of takeovers and exchange rates to rise about 1.5 percent, the
Paris-based company said in an e-mailed statement today. Atos had repeated a
forecast for 3 percent growth as recently as September.

- Deutsche Lufthansa AG: Europe’s second-biggest airline had its credit rating
increased by Standard and Poor’s after earnings and the company’s forecasts for
full-year profits both rose.

- Metro AG, Germany’s largest retailer, said third-quarter profit fell 31
percent as the acquisition of Polish store chain Geant and Wal-Mart Stores
Inc.’s German supermarkets added costs. Net income declined to 81.5 million
euros ($103.7 million), or 25 cents a share, from 118.5 million euros, or 36
cents, the Dusseldorf, Germany-based company said in documents distributed
before a press conference today. The figure was below the 101 million euro
median forecast of nine analysts in a Bloomberg survey.

- Suez SA: The water and power company that’s merging with Gaz de France SA said
nine-month revenue rose 8.7 percent to 32.4 billion euros on higher power
prices.

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** US MARKETS **
Dow 0,24%; Nasdaq 0,96%; S&P 0,5%; Soxx 1,16%; Russel2k 1,16%; DJAIG -0,19%;
10yr Bond -0,03%; 10yr Yield 4,72%; Crude future 60,56; Gold 595,8

| ConsDisc 1,35%| Telecom 1,19%| Financials 0,82%| Materials 0,49%| ConsStaples
0,47%| Technology 0,37%| Healthcare 0,28%| Industrials -0,01%| Energy -0,03%|
Utilities -0,34%

- McAfee Inc.rose $1.79, or 6.7 percent, to $28.61 in extended trading. The
world’s second-biggest maker of security software said third-quarter profit was
36 cents a share, excluding some items. That topped the average 30-cent estimate
from analysts surveyed by Thomson.

- Microsoft Corp.added 2 cents to $28.37. The world’s largest software maker
said profit for the quarter that started Oct. 1 will be 22 cents to 24 cents a
share on sales of $11.8 billion to $12.4 billion. Analysts surveyed by Thomson
Financial anticipated 34 cents and $12.9 billion, on average.

- With earnings still in focus as the biggest week of the quarter fades into the
record books on a strong note, notable reports will come from Baker Hughes
(BHI), Cardinal Health (CAH), Chevron (CVX), Exelon (EXC), Fortune Brands
(FO), Ingersoll-Rand (IR), and Timberland (TBL).

- On the economic front, an advance read on Q3 GDP and accompanying chain
deflator will be out at 14:30 CET while a revision on University of Michigan
Sentiment will hit the wires just after the market opens at around 15:45 CET.

** ASIAN MARKETS **
Nikkei -0,77%; Kospi -0,71%; HSI 0,46%; Taiwan 0,1%; China 0,52%; India 0,99%;
Thailand 0,07%; Australia -0,53%

- ICBC’s Shares Climb on Debut After World Record $19.1 Billion Share Sale
- GM Shifts Savings From Cost Cuts to Toyota-Fighting Vehicles, People Say
- Australia’s Worst Drought in a Century May Crimp Growth, Spur Inflation
- Asian Stocks Fall, Led by Japan’s Banks, Mitsubishi UFJ on Consumer Prices
- Japan’s Key Inflation Rate Unexpectedly Slows; Rate Increase Less Likely
- Japan Seeks Oil in Iraq and Indonesia After Losing Control of Iran Field
- Citigroup, Credit Suisse Group Vie for Prime Brokerage Expansion in Asia
- DBS Third-Quarter Profit Rises 32 Percent as Economic Growth Spurs Loans
- Bharti Airtel’s Profit Surges 79 Percent After Mobile Subscribers Double
- China Government Bans Domestic Banks From Offshore Yuan Derivative Trading

** EUROPE; IN PLAY TODAY **

- Continental AG: Chief Executive Officer Manfred Wennemer sees the risks of the
world’s fourth-largest tiremaker being taken over by private equity or a
competitor as “very slim.”

- Fiat SpA: Chief Executive Officer Sergio Marchionne said in a conference call
after markets closed that he never gave a sales target of 3 million car units
for 2010. The company’s long-term survival depends on alliances, he said.

- Novo Nordisk A/S: The world’s largest insulin maker may report third-quarter
net income fell 3.6 percent to 1.7 billion kroner ($290 million) on sales of 9.9
billion kroner, according to a poll by SME Direkt.

- Red Electrica de Espana SA: The operator of Spain’s electricity network is
scheduled to report nine-month financial results before the start of trading.
Dresdner Kleinwort analyst Cesar Gonzalez expects net income to rise 22 percent
to 155 million euros.

- RWE AG: Germany’s third-largest utility said it sold the real estate
operations of its Harpen AG unit to private equity funds Whitehall Funds and
Cerberus European Investments LLC.

- Sandvik AB: The world’s biggest maker of metal-cutting tools may say
third-quarter profit climbed 14 percent to 1.66 billion kronor on 17.2 billion
kronor in sales, according to an analyst survey by SME Direkt.

- Volkswagen AG: Europe’s largest carmaker plans to release third-quarter
results. The company may post a loss because of the costs of eliminating jobs in
Germany and lengthening the workweek, according to analysts surveyed by
Bloomberg News.

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Banks: Santander up nearly 1% post slightly better than expected numbers. Elsewhere the sector was again quiet.
Insurance: Aviva hit hard despite a broadly in-line set of new business figures – expectations had run up into the numbers. Elsewhere it’s very
quiet again.
Retail: PPR down 2% with broker earnings downgrade weighing on the stock on top of weakness attributed to its earnings miss. Cadbury down
small after the firm cut guidance for FY revenue growth and margins – the negative news looks already to have been priced in prior to reporting.
Consumer: Vedior off 6% on disappointment over the net income line and on sales growth in France and the Netherlands. Pernod down 2% on
light numbers and despite reaffirming guidance. Carnival flat ahead of Royal Caribbean numbers tomorrow. Carrefour rallies despite French food retail market share data showing flat share month-on-month.
Pharma/Chems: AzstraZeneca down more than 4% after its stroke drug NXY-059 failed a clinical trial. The firm is due to report numbers at 11am UK time. GlaxoSmithKline off small into numbers at 12pm UK time. DSM off 2.5% and Ciba up small on numbers. Rhodia up 3.5% after selling its silicones business to China National Bluestar.
Oils: Utils: Royal Dutch Shell up on very strong numbers with the beat coming from the downstream business. Evidence of switching into the name and out of BP.
Tech: Business Objects up over 5% on solid numbers seen last night. The firm also raised FY guidance both at the headline and underlying level.
Dassault Systemes down 2% on a disappointing mix in its Q3 numbers. Nokia is a strong performer, up 2% on the session. Capgemini down 1% after pre-announcing and on news it plans to acquire India’s Kanbay for $1.25bn.
Cap Goods: Renault off its top and in the red after posting a solid set of numbers after the close last night. DaimlerChrysler holds onto yesterday’s gains, trading broadly flat over the morning. Continental hit down 2% on speculation the firm could warn and despite the firm denying the story.
ThyssenKrupp up sharply on speculation Nucor Steel could bid for the firm.
Telcos/Media: The sector leads the market this morning with the index hitting its highest level since February 2002. France Telecom leads the charge, up nearly 4% after posting better than expected revenues and EBITDA, and reiterating its FCF guidance of €7bn for 2006. Telenor up 7%
on very strong numbers and upgraded guidance. In the media space, WPP continues its run into tomorrow’s numbers. Antena3 bounces off early lows on slightly light numbers and a lacklustre outlook.

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- DaimlerChrysler has announced this morning that it is not planning to sell its Chrysler Group unit.

- Nissan has reported that 2Q net income increased to Y164 bln versus Y125 bln last year due in part to the sale of a stake in truckmaker Nissan Diesal.

- Cap Gemini has offered to buy Kanbay International of the US for $1.25 bln.

- Independent News and Media has launched a bid for APN News and Media, the Australian media group, valuing it at around A$2.7 bln.

- France Telecom had announced that 3Q sales rose by 8.9% after the company bought Spanish mobile phone company Amena.

- Santander Central Hispano has announced that 3Q profit increased by 30% on increased lending in Latin America and cost-cutting at Abbey National.

- Banco Sabadell has announced that 3Q net income has increased by 22% to E169.5 mln on higher lending and fee revenue.

- Aviva has reported that new business increased by 18% in the first nine months of the year to Stg19.1 bln versus Stg16.3 bln last year on increased sales of retirement plans in the UK.

- Royal Dutch Shell has reported that 3Q net profit fell to $5.94 bln from $9 bln last year as lost output in Nigeria restricted growth.

- Airbus has said it will sell 150 A320 jets to Chinese Airlines and will set up a factory in Tianjin to produce the planes.

- Boeing has admitted its new 787 Dreamliner jet is suffering from weight and supplier problems.

- Flight Centre, the Australian travel agency chain, has had an offer by the founder and a buy-out firm to take the firm private in a deal worth A$1.6 bln.

- BAT has announced that 3Q profit advanced to Stg446 mln versus Stg442 mln last year disappointing analysts as growth was hindered by lower sales in Japan and Germany.

- United Biscuits has been bought by private equity firms PAI Partners and Blackstone for Stg1.6 bln.

- Altria has said it will finalise the timing for spinning off its Kraft Foods subsidiary at its board meeting on January 31.

- Ferrenti, the luxury yacht maker, is in a bidding war that could value the company at E1.7 bln.

- PPR, the French retailer, has announced that 3Q sales increased by 5.8% on increased demand for luxury goods.

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