dealingfloor.com

** US MARKETS **
Dow -0,18%; Nasdaq -0,27%; S&P -0,13%; Soxx 0,35%; Russel2k -0,19%; DJAIG
-1,45%; 10yr Bond 0%; 10yr Yield 4,48%; Crude future 62,42; Gold 629,55

| Telecom 0,37%| Financials 0,22%| Healthcare 0,13%| ConsStaples 0,1%| Materials
-0,08%| ConsDisc -0,1%| Industrials -0,23%| Technology -0,52%| Utilities -0,6%|
Energy -0,76%

- Lone Star’s Purchase of Korea Exchange Bank Was Illegal, Prosecutors Say
- Home Depot Probe Uncovers 19 Years of `Routinely’ Backdating Stock Options
- Bernanke May Clash With Incoming Democratic Congress on Wages, Inflation
- GM Will Cut Production at Three SUV Factories in January Amid Slack Demand
- Boeing Wins $5 Billion Order From Lufthansa for New 747 in Blow to Airbus

- Weekly Jobless Claims (consensus 325K) are due out at 14:30 CET and October
Consumer Credit figures are due out at 21:00 CET.

** ASIAN MARKETS **
Nikkei 0,62%; Kospi -0,24%; HSI -0,18%; Taiwan -0,09%; China 1,53%; India
-0,02%; Thailand 0,29%; Australia -0,06%

- Asian Stocks Climb to Six-Month High, Led by Canon and Honda; BHP Declines
- Lone Star’s Purchase of Korea Exchange Bank Was Illegal, Prosecutors Say
- Elpida, Powerchip Plan $14 Billion Plant to Be Largest Memory-Chip Maker
- Asian Currencies Advance After China Central Bank Says Dollar May Decline
- Indonesia Cuts Key Interest Rate to 14-Month Low to Spur Consumer Spending
- Malaysia Industrial Output Unexpectedly Drops for First Time in 20 Months

- Gold Falls in Asia as Traders’ Charts Indicate Further Declines Possible
- Shanghai Copper Futures Drop on Signs U.S. Housing Demand May Be Slowing
- China’s Mine Deaths Reach Five-Month High as Owners Resist Closure Orders

** EUROPE: IN PLAY TODAY **

- The ECB’s governing council will raise its benchmark rate by a quarter-point
to 3.5 percent at 13:45 CET. in Frankfurt today, according to all 41 economists
surveyed by Bloomberg News.

- Bouygues SA, the world’s second-biggest construction company and the operator
of France’s No. 3 mobile-phone network, said third-quarter profit climbed 36
percent on roadbuilding contracts and French demand for housing. Net income
advanced to 358 million euros ($476 million) from 264 million euros a year
earlier, the Paris-based company said. Profit exceeded the 342 million-euro
median estimate from a survey of 12 analysts by Bloomberg News.

- Oil Rises on Concern Heating Demand to Rise as OPEC Considers Output Cuts.

- Areva SA: The world’s biggest maker of nuclear reactors won a contract to
modernize the Moscow electricity network. The Paris-based company said the deal
is worth “several tens of millions of euros.”

- Deutsche Lufthansa AG: The airline’s freight unit expects to keep pace with
worldwide cargo growth of about 6 percent next year, said Andreas Otto, the
division’s board member in charge of sales. Separately, Europe’s second-biggest
airline said it ordered 20 of the planned 747-8 passenger planes from Boeing
Co., worth $5 billion at list prices.

- Gallaher Group Plc: The maker of Benson & Hedges cigarettes in Europe said it
received a takeover approach. The talks are preliminary and may not lead to an
offer, the Weybridge, England-based company said in a statement.

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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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** 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 -0,54%; Nasdaq -0,85%; S&P -0,53%; Soxx -1,36%; Russel2k -0,38%; DJAIG
-0,47%; 10yr Bond -0,04%; 10yr Yield 5,2%; Crude future 70,7; Gold 583,85

| Energy 0,43%| ConsStaples -0,12%| Financials -0,38%| Materials -0,4%|
Utilities -0,45%| Healthcare -0,58%| Telecom -0,6%| ConsDisc -0,7%| Industrials
-0,71%| Technology -1,32%

** US HEADLINES **
- Goldman Increases Associated Ports Bid to $5.1 Billion, Topping Macquarie
- General Motors Plans Gas-Electric Car to Catch Up to Toyota, People Say
- Durable Goods Orders in U.S. Probably Rose on Computer, Machinery Demand
- Treasuries Poised for Second Week of Declines as Interest Rate Bets Rise
- Vonage IPO Investors Overlooked Losses, Growing Expenses and Citron’s Past
- Generic Drug Revolution, Pushed by Medco, May Cut U.S. Costs $49 Billion
- Dollar May Strengthen on Speculation Federal Reserve to Raise Rates Twice

** US: IN PLAY TODAY **
- Oracle (+0.5% after hours) reports Q4 (May) earnings of $0.29 per share,
$0.01 better than the Reuters Estimates consensus of $0.28; non-GAAP revenues
rose 21.7% year/year to $4.94 bln vs. the $4.76 bln consensus. Co pre-announced
non-GAAP EPS of $0.29 on revs of $4.94 bln on June 15th.

- With no notable earnings reports scheduled today, investors will look for
economic data and perhaps ensuing action in the Treasury market to set the tone
of trading for the day, especially with the yield on the 10-yr note near 4-yr
highs. May Durable Orders at 14:30 CET is the only scheduled report but will
offer investors an update on the health of business investment.

** ASIAN MARKETS **
Nikkei -0,08%; Kospi -1,05%; HSI -0,56%; Taiwan -0,51%; China 0,45%; India
-0,76%; Thailand -0,34%; Australia -0,66%

** ASIAN HEADLINES **
- Asian Shares Drop on Concern Over Economic Growth; Nissan, Kookmin Slide
- Carlyle’s Bid for Taiwan Eastern Multimedia Company Held Up, Official Says
- UBS, Macquarie Top Acquisition Rankings in Australia After Record Deals
- China’s Aluminum Corp. Seeks to Invest in Mongolian, Russian Copper Mines
- Singapore’s Consumer Prices Increased 1.1 Percent in May From Year Earlier
- PCCW Shares Fall on Concern China Network May Step in, Delay Asset Sale
- Thailand to List CAT Telecom and TOT in Second Quarter of 2007 After Delay
- China’s Datang, Utility Shares May Gain as Government Eases Price Controls
- Toyota’s Watanabe Risks Quality to Cut Engine Costs as Steel Prices Rise

** EUROPEAN MARKETS **
S&P future 0,03%; Bund future -0,04%; Crude future 70,7; €/$ 1,2569; Gold 583,85

** EUROPE: IN PLAY TODAY **

- Barclays Plc: The U.K.’s third-biggest bank by
market value agreed to buy HomEq Servicing Corp., a U.S.
mortgage-servicing unit, from Wachovia Corp. for $469
million as it seeks to package and trade more debt in the world’s
largest economy.

- BNP Paribas SA: The French bank is offering 1
billion euros ($1.3 billion) to buy 51 percent of Fiat SpA’s Fidis Retail
consumer-finance business, Radiocor reported, citing unidentified people
familiar with the transaction.

- Continental AG: The auto parts maker expects an
improved operating profit for the second quarter before special
items, Reuters reported, citing Chief Financial Officer Alan
Hippe.

- Deutsche Telekom AG: European Union regulators are
considering placing limits on charges for mobile-phone text
messages, threatening revenue at companies including Deutsche
Telekom, according to an EU draft proposal obtained by Bloomberg.

- European Aeronautic Defence & Space Co.: The parent
of Airbus SAS may be active. Airbus has raised the list prices on
all its aircraft, the Financial Times Deutschland said, citing a
company spokesman.

- Fugro NV: The world’s largest surveyor of
deepwater oil fields is scheduled to give a first-half trading
update. Fugro said May 10 that it expects record profit and sales
this year as demand for its services increases.

- InBev NV: Anheuser-Busch Cos, the world’s
largest brewer, is negotiating to allow its distributors to sell
and market InBev NV’s European brands in the U.S., according to
Beer Business Daily, an industry journal.

- Nutreco Holding NV: A Dutch animal-feed maker said
it will pay a 300 million euro dividend to
shareholders. The company will also start a 50 million euro share
buyback program, it said in an e-mailed statement.

- Scottish Power Plc: The U.K.’s fifth-largest energy
provider will raise the prices it charges customers for
electricity by 10 percent and natural gas by 17 percent to cope
with rising costs.

- Volkswagen AG: Europe’s largest carmaker may win 95
percent acceptance of an early retirement program and more than
1,000 workers may take up a buyout package in a workforce-cutback
program aimed at reducing costs, said Bernd Osterloh, head of the
company’s works council.

** EUROPE: UPS & DOWNS **

+ STATOIL RAISED TO `BUY’ FROM `HOLD’ AT DEUTSCHE BANK
+ ROYAL DUTCH SHELL RAISED TO `BUY’ FROM `HOLD’ AT DEUTSCHE BANK
+ ACCOR PRICE ESTIMATE RAISED TO EU62 FROM EU60 AT UBS
+ ENI PRICE TARGET RAISED 4% TO EU29 VS EU28 AT DEUTSCHE BANK
+ OMV PRICE TARGET RAISED TO EU55 VS EU50 AT DEUTSCHE BANK
+ TOTAL PRICE TARGET RAISED TO EU65 VS EU62.5 AT DEUTSCHE BANK
+ BP PRICE TARGET RAISED TO 800P VS 750P AT DEUTSCHE BANK
- KPN CUT TO `EQUAL-WEIGHT’ VS `OVERWEIGHT’ AT MORGAN STANLEY

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** US MARKETS **
Dow 0,95%; Nasdaq 1,62%; S&P 0,97%; Soxx 2,09%; Russel2k 1,94%; DJAIG 0,92%;
10yr Bond -0,01%; 10yr Yield 5,16%; Crude future 70,6; Gold 592,46

| Materials 2,4%| Energy 1,92%| Technology 1,67%| Industrials 1,03%| ConsDisc
0,94%| Financials 0,75%| Healthcare 0,47%| ConsStaples 0,4%| Utilities -0,09%|
Telecom -0,12%

** US HEADLINES **
- Univision Sale Set Back as Kohlberg Kravis, Blackstone Drop Out of Bidding
- Steel Shares Peaked Say Appaloosa, Solaris Hedge Funds as Short Sales Soar
- Paulson to Sell Goldman, China Bank Stake to Ease Treasury Confirmation
- Federated Fund Seeks Municipal Bonds, Dividends to Weather Market Slide
- Oil Trades Above $70 on Concerns U.S. Gasoline Supplies Not High Enough
- Pimco’s Mewbourne Favors Emerging Market Corporate, Local-Currency Debt
- Refco’s Bank Hid $1 Billion in Losses From Hedge Funds and Arafat Casino

** US: IN PLAY TODAY **
With the Fed focused on “incoming” economic data, today’s jobless claims
report at 14:30 CET may garner some added attention. May Leading Indicators will
be out at 16:00 CET but don’t usually have much of an impact on trading.

On the earnings front, A.G. Edwards (AGE), Family Dollar (FDO), and Rite Aid
(RAD) are scheduled to report before the bell while tech companies Oracle Corp
(ORCL) and Solectron (SLR) will post earnings after the close.

** ASIAN MARKETS **
Nikkei 3,2%; Kospi 1,16%; HSI 1,29%; Taiwan 2,95%; China -0,04%; India 2,55%;
Thailand 1,23%; Australia 1,5%

** ASIAN HEADLINES **
- Japan’s Trade Surplus Widens for First Time Since 2004 on Export Demand
- Air China Offers $416 Million to Buy Out Minority Shareholders in CNAC
- Asian Stocks Climb on U.S. Earnings Optimism; Canon, Hyundai Motor Advance
- ZTE Says It Has `Pressure’ to Buy Companies After Nokia, Siemens Merger
- PCCW’s Shares Halted After Soaring Amid Bids for Phone and Media Assets
- China May Curb Foreign Investment in Real Estate, Commerce Official Says
- Bank of Japan’s Nishimura Says Low Interest Rates Could Overheat Economy
- Taiwan Semiconductor Says Its Market Share Rose as New Plants Came On Line
- Gold Rises For a Third Straight Day as Dollar Declines Against Euro, Yen
- Copper Prices Rise in Asia After London Stockpiles Fall to Four-Month Low

** EUROPEAN MARKETS **
S&P future 0,24%; Bund future -0,19%; Crude future 70,59; €/$ 1,26615; Gold
593,43

** EUROPE: IN PLAY TODAY **

- Allianz plans to cut 7,480 jobs at its German Insurance unit and Dresdner Bank
units to boost profit. It will cut 5,000 workers at the insurance operations as
it reduces administrative offices to 10 from 21 and will cut 2,480 jobs from
Dresdner Bank by 2008. Allianz will combine its German life, health and property
and casualty units under one holding company as part of the group’s CEO
restructuring plan.

- Areva SA, the world’s biggest maker of nuclear
power stations, said it has no plans to buy Canada’s Candu
nuclear reactor business, dismissing a Toronto newspaper report
that the companies were in talks for a transaction.

- Fiat SpA: Italy’s largest manufacturer will buy back
all of the Ferrari SpA stake it sold in 2002 except for 5
percent owned by Abu Dhabi, said Chief Executive Officer Sergio
Marchionne.

- Lafarge SA: The world’s biggest maker of building
materials is scheduled to hold a daylong presentation on its
strategy.

- Royal KPN NV: The largest Dutch phone company
settled a securities class-action lawsuit linked to the 2002
bankruptcy of KPNQwest NV for $4.18 million.

- Sanofi-Aventis SA, the world’s third-largest
drugmaker won approval to sell its Acomplia weight-loss drug in
Europe after a panel of scientists gave their support in April.

- Swisscom AG: The Swiss Christian Democratic Party
said the government should transfer a 51 percent stake in
Switzerland’s dominant telephone company to a foundation to
block foreign control. The government owns 62.5 percent of the
provider’s shares. Swiss parliament voted against a plan
proposed by the Cabinet to privatize Swisscom.

** EUROPE: UPS & DOWNS **
+ ANHEUSER PRICE ESTIMATE RAISED 17% TO $49 AT UBS
+ HVB RAISED TO `OVERWEIGHT’ FROM `NEUTRAL’ AT HSBC
+ HBOS PRICE ESTIMATE RAISED TO 1110P FROM 1088P AT LEHMAN
+ VEOLIA PRICE ESTIMATE RAISED TO EU41 FROM EU32 AT DEUTSCHE
+ VOLKSWAGEN RAISED TO `OVERWEIGHT’ FROM `NEUTRAL’ AT JPMORGAN
+ HENNES & MAURITZ RAISED TO `NEUTRAL’ FROM `SELL’ AT MERRILL
+ HBOS PRICE ESTIMATE RAISED TO 1005P FROM 980P AT UBS
- SWISS RE PRICE ESTIMATE CUT TO SF96 FROM SF105 AT UBS

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** US MARKETS **
Dow -0,66%; Nasdaq -0,92%; S&P -0,91%; Soxx -0,96%; Russel2k -1,78%; DJAIG
-1,88%; 10yr Bond 0,1%; 10yr Yield 5,12%; Crude future 68,98; Gold 568,75

| Technology -0,36%| ConsStaples -0,4%| ConsDisc -0,46%| Financials -0,62%|
Telecom -0,72%| Industrials -0,83%| Healthcare -0,92%| Utilities -1,28%|
Materials -1,87%| Energy -3,13%

** ASIAN MARKETS **
Nikkei -1,43%; Kospi -2,1%; HSI -1,25%; Taiwan -3,33%; China -0,2%; India
-1,22%; Thailand -1,96%; Australia -1,09%

** HEADLINES **
- Inflation Ravages U.S. Wages, Fueling Income Disparity, Angst About Bush
- Intelsat, Healthsouth, Libbey Bond Sales Struggle as Investors Flee Risk
- Housing Starts in U.S. Probably Remained Close to 17-Month Low During May
- Mack’s Merger Caution, Talent Rebound Fail to Propel Morgan Stanley Stock
- Univision May Receive at Least Two Takeover Bids of More Than $13 Billion
- Yen Gains as Fukui Says BOJ Should Adjust Monetary Policy `Without Delay’
- U.S. Treasuries Little Changed; Report Today May Signal Housing Slowdown
- Copper in London, Down 25 Percent Since May, Slumps as Growth Outlook Dims
- Oil Trades Near $69 After Falling as U.S. Gasoline Stockpile May Increase
- Honda Bets Scientists in Secret Lab Can Outsmart Toyota With Clean Diesel

** BOJ **
- The yen rose after Bank of Japan Governor Toshihiko Fukui said policy should
be adjusted “without delay” and as minutes from the last central bank
meeting said a weaker dollar won’t hurt Japanese companies. Real interest rates
are at extremely low levels and could risk stimulating growth excessively, Fukui
said today in a speech at the Japan National Press Club in Tokyo. The yen has
risen 2.2 percent this year on speculation the bank will end its five-year
policy of keeping borrowing costs near zero percent.

** EUROPEAN MARKETS **
S&P future 0,06%; Bund future 0,03%; Crude future 68,98; €/$ 1,25875; Gold
568,75

** EUROPE: IN PLAY TODAY **

- Mittal Steel board member Francois Pinault criticized the methods used by
Arcelor to fend off Mittal’s takeover bid, claiming it used up its cash reserves
for share buybacks and ceded control to a competitor, OAO Severstal (Le Figaro).

- Air France-KLM Group said members of the SkyTeam airline marketing alliance
have received a so-called statement of objections from the European Commission.
The alliance is “confident” they can settle the case “amicably” the statement
said. The stock’s target price was raised 9.2% to E23.80 by Citigroup.

- BNP Paribas agreed to buy Harrington Bannon, an Irish property consultant for
an undisclosed amount. The purchase will be completed July 1.

- EADS’ ended a meeting without commenting on its Co-Ceo’s future, claiming the
session had addressed how to avoid delays in producing the Airbus A380.

- PPR agreed to sell its Printemps department stores for over E1.1bln in a
leveraged management buyout supported by Deutsche Bank.

- Bayer moved closer to winning the necessary stake to complete its E17bln
acquisition of Schering after buying enough shares to control 64% of the group.

- Deutsche Boerse offered to keep the technology and stock trading platform of
Euronext but refused to raise its bid for the exchange as it seeks to thwart a
takeover by NYSE Group.

- E.ON, which is trying to take over Endesa, holds press conference.

- Workers at Volkswagen’s main German plant plan to strike today to put pressure
on management to reach a contract agreement with them.

- Premiere to outline future business strategy at a press conference.

- British Energy expected to report a surge in FY pretax profit, before
exceptional items and goodwill of to £588m from £232m a year earlier.

- Old Mutual Market scheduled to release an update on its integration with
Skandia

- Novartis is recalling a patch of its Triaminic children’s cough and cold
medicine after it was linked to causing seizures in children who had taken the
product.

- Logitech is powering the Video Call feature in the new Windows Live Messenger
platform, unveiled by Microsoft.

** EUROPE: UPS & DOWNS **
+ NOKIA PRICE ESTIMATE RAISED 6% TO EU17.5 AT ING
+ FRAPORT RAISED TO `OVERWEIGHT’ FROM `UNDERWEIGHT’ AT HSBC
+ LLOYDS TSB PRICE ESTIMATE RAISED TO 620P FROM 610P AT DEUTSCHE
+ CAPGEMINI PRICE ESTIMATE RAISED TO EU43 FROM EU40 AT DEUTSCHE
+ AIR FRANCE PRICE EST. RAISED 9.2% TO EU23.80 AT CITIGROUP
+ ARM HOLDINGS RAISED TO `BUY’ FROM `HOLD’ AT DEUTSCHE BANK
+ VOESTALPINE FY06/07 EPS EST. RAISED 21% TO EU20.5 AT JPMORGAN
+ VINCI RESUMED `OVERWEIGHT’ AT MORGAN STANLEY
+ SIEMENS PRICE EST. RAISED TO EU87 FROM EU79 AT MORGAN STANLEY
+ LLOYDS TSB PRICE ESTIMATE RAISED TO 545P FROM 540P AT UBS
+ EASYJET PRICE ESTIMATE RAISED TO 460P FROM 405P AT UBS
+ VEOLIA ENVIRONNEMENT RAISED TO `NEUTRAL’ FROM `REDUCE’ AT UBS

- ISRAELI STOCKS CUT TO `UNDERWEIGHT’ AT HSBC
- NOVO-NORDISK PRICE EST. CUT TO DKK385 VS DKK425 AT DEUTSCHE
- Eiffage Cut to `Hold’ at Citigroup
- LG ELECTRONICS CUT TO `EQUAL WEIGHT’ AT MORGAN STANLEY

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** US MARKETS **
Dow -0,01%; Nasdaq -0,66%; S&P -0,37%; Soxx -0,89%; Russel2k -1,14%; DJAIG
0,69%; 10yr Bond -0,18%; 10yr Yield 5,13%; Crude future 69,97; Gold 581,15

| Telecom 0,38%| ConsStaples 0,08%| Utilities -0,04%| Industrials -0,19%|
Healthcare -0,29%| ConsDisc -0,37%| Technology -0,43%| Energy -0,6%| Materials
-0,64%| Financials -0,69%

** US HEADLINES **
- Dollar May Fall on Concern Fed Interest Rate Increases Will Slow Growth
- Treasury Investors, Certain of June Rate Increase, Prepare for August Rise
- U.S. Stocks Drop for Second Straight Week on Concern Rates Will Increase
- Delphi, Second-Biggest Union Reach Accord With GM on Retirements, Buyouts
- Goldman, Citi, UBS, Merrill Fees in Asia Squeezed by Competition, Tumult
- Ford Expects as Many as 11,000 Workers to Retire, Take Buyouts This Year
- Poole Says U.S. Inflation Is Above His `Comfort Zone’; Fed May Need to Act
- Ford Plans to Invest in Three Mexican Factories as It Trims U.S. Workforce
- Worldwide Spare Oil Output Capacity May Double by 2010, BP Analyst Says
- Goldman Sachs Names Cohn, Winkelried as Co-Presidents, Operating Chiefs
- KKR Pays Brambles $1.3 Billion for Cleanaway and Industrial Services Units
- ConocoPhillips May Spend as Much as $10 Billion to Expand Australian Plant

** US: IN PLAY TODAY **
- The NAHB Housing Market Index is reported at 19:00 CET.
- Circuit City (CC) reports Q1 earning before the openening bell.

** ASIAN MARKETS **
Nikkei -0,13%; Kospi -1,14%; HSI -0,51%; Taiwan 0,11%; China 0,65%; India
-0,29%; Thailand -1,12%; Australia -1,07%

** ASIAN HEADLINES **
- KKR Pays Brambles $1.3 Billion for Cleanaway and Industrial Services Units
- Asian Stocks Drop for First Day in Four on Rate Concern; Sony Leads Slide
- CAMC Engineering Shares More Than Double After China’s First IPO in a Year
- South Korean Won Drops on Speculation North Korea Is Ready to Test Missile
- Moody’s May Raise Japan’s Rating in 12-18 Months as Deflation Diminishes
- Malaysia Is Confident of Achieving 6 Percent Growth This Year, Najib Says
- Bharti Airtel `Ready’ to Expand Overseas, Make Acquisitions, Chairman Says
- Bangkok’s `Ghost Buildings,’ Idle Since ‘98 Crisis, Become Hotels, Offices

** EUROPEAN MARKETS **
S&P future -0,01%; Bund future -0,17%; Crude future 69,53; €/$ 1,25955; Gold
569,85

** EUROPE: IN PLAY TODAY **

- EADS’ Co-CEO said there were “no disagreements” between the company’s French
and German shareholders regarding the “crisis” that followed last week’s
announcement on delays to the A380 superjumbo planes (La Tribune). The same
Co-CEO denied any wrongdoing when selling company stock back in March (Le
Parisien).

- Arcelor may be active after the Figaro reported that the group might postpone
a June 21 extraordinary meeting for a vote on a buyback plan. The stock reached
a new 3-month relative high against the Cac 40 on Friday.

- Axa is expected to cut 300 jobs at its newly acquired Winterthur unit
(Tages-Anzeiger).

- Veolia Environnement could be active after abandoning plans of a friendly
merger with Vinci. The stock reached a new 3-month relative low against the Cac
40 on Friday.

- Suez may be active after announcing it would seek alternatives to its merger
with GDF should a government bill needed to permit the accord to proceed be
delayed. It also could be active after reports indicated that Enel was still
interested in the group and still had the “financial means” to do so (Le Monde).

- Nokia and Siemens agreed to combine their telecommunications network equipment
units in a transaction worth about E25bln with Nokia the “stronger” partner in a
new company based in Finland. The deal may be announced today (WSJ).

- Allianz could cut “thousands” of jobs and close as many as 6 regional
headquarters as part of a restructuring program to improve its German business
(Frankfurter Allgemeine SonntagsZeitung).

- Deutsche Boerse plans to write directly to Euronext’s shareholders with
details of its takeover offer, in an effort to beat out NYSE Group (Die Welt).

- DaimlerChrysler set to offer more small-engine versions of its cars and trucks
as its sales decline amid rising fuel prices, according to its CEO.

- Altana is considering investment companies in its search for a partner for its
pharmaceuticals unit after it was turned down by strategic investors (FTD).

- Volkswagen’s head of personnel labelled the situation at the carmaker as
“serious” but denied reports of an additional 10,000 job cuts. In other news,
the group will cut the price of its next Polo model by E2,000 to boost revenue
(Automobilwoche).

- Associated British Ports could receive a bid by Macquarie Bank worth £2.7bln
or 865p per share, higher than the 840p per share offer it received last week by
a Goldman Sachs-led consortium (Sunday Times).

- NYSE Group would consider opening a stock exchange in London to compete with
London Stock Exchange if its plan to merge with EuroNext doesn’t deliver enough
share listings (FT).

- ISoft may get bids from private equity firms including Permira, Carlyle Group
and Blackstone Group (Observer).

- BT Group may be fined “millions of pounds” by UK authorities by the end of the
month for alleged anticompetitive behaviour over pricing high speed Internet
access (Times).

- Banco Santander Central Hispano targets a 13% rise in FY06 net income to a
record E7bln after cost cuts in the UK and higher sales in Latin America.

- A US federal judge approved the $1.1bln settlement of a class action lawsuit
brought by Royal Ahold NV shareholders over an accounting scandal, the most
money ever paid by a European company to settle US fraud charges.

- Telecom Italia’s CEO declared the group was considering buying Time Warner’s
AOL Internet units in Germany and France.

- Nestle acquired weight-loss companyt Jenny Craig for $600m, the acquisition
will not dilute its earnings.

- Swiss Re hired Roger Ferguson, the former vice chairman of the US Federal
Reserve, to head its American operations starting in July.

** EUROPE: UPS & DOWNS **
+ INTEL RAISED TO `BUY’ FROM `NEUTRAL’ AT UBS
+ Q-CELLS RAISED TO `OUTPERFORM’ VS `NEUTRAL’ AT CREDIT SUISSE
+ W.H. SMITH RAISED TO `BUY’ FROM `NEUTRAL’ AT MERRILL LYNCH
- CARDINAL HEALTH CUT FROM JPMORGAN `FOCUS LIST’
- WOOLWORTHS LOWERED TO `UNDERPERFORM’ AT CREDIT SUISSE
- WOLTERS KLUWER PRICE EST. CUT TO EU20.3 VS EU21.5 AT DEUTSCHE
- REUTERS PRICE ESTIMATE CUT TO 500P FROM 530P AT DEUTSCHE

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** ASIAN MARKETS **
Nikkei 2,91%; Kospi 3,44%; HSI 2,41%; Taiwan 2,32%; China 1,58%; India 4,37%;
Thailand 3,17%; Australia 1,92%

** ASIAN HEADLINES **
- Asian Stocks Surge Most in Two Years on Bernanke Remarks; Samsung Climbs
- Nissan Cuts Production at Two Factories as Sales Slide for Eighth Month
- Infosys to Hire More Workers in U.S., China, Chief Executive Nilekani Says
- Singapore Exports Unexpectedly Declined 2.3 Percent in May on Disk Drives
- Oracle and Lenovo Say That Asia Sales Might Slow as Interest Rates Rise
- Sri Lanka Unexpectedly Raises Key Interest Rates for First Time This Year
- NEC Electronics Expects Third-Quarter Profit, First in More Than a Year
- Bank of Japan Will Maintain Close Watch on Market Movements, Fukui Says
- Infosys, Indian Software Shares May Rebound as Rupee’s Decline Lifts Sales

** EUROPEAN MARKETS **
S&P future -0,03%; Bund future -0,06%; Crude future 70,12; €/$ 1,26455; Gold
581,55

** EUROPE: IN PLAY TODAY **

- Credit Suisse Group’s head of global equity strategy raised his recommendation
of stocks today saying that inflation concerns will be temporary and that
investors have become too bearish. The London-based strategist raised equities
to a 5 percent “overweight” above his benchmark and lowered bonds back to
their standard weighting. He cited corporate buybacks as another
reason to step in now and purchase shares.

- Centrica Plc : The U.K.’s largest energy supplier will provide a trading
update today.

- Carnival Corp.: The world’s largest cruise operator is scheduled to release
fiscal second-quarter earnings figures and will hold a conference call.

- Elan Corp.: The ratings outlook for Ireland’s biggest drugmaker was raised to
stable from negative by Moody’s Investors Service in anticipation of the
company’s Tysabri multiple sclerosis treatment returning to pharmacy shelves
next month.

- Gaz de France SA and Suez SA: The two French utilities reiterated their plan
to merge, shrugging off doubts expressed by several lawmakers of the country’s
governing party.

- Repsol YPF SA: Spain’s largest oil company will hold its annual shareholders’
meeting in Madrid. The company may lower its reported Venezuelan oil and gas
reserves for a second time in 2006 after completing an audit. The results of the
audit may be disclosed today, Expansion reported yesterday.

** EUROPE: UPS & DOWNS **
+ COMMERZBANK RAISED TO `BUY’ FROM `HOLD’ AT DEUTSCHE BANK
+ HEIDELBERGER DRUCK RAISED TO `BUY’ FROM `HOLD’ AT DEUTSCHE
+ SAINSBURY RAISED TO `HOLD’ FROM `SELL’ AT DEUTSCHE BANK
+ WOLTERS KLUWER RAISED TO `NEUTRAL’ AT JPMORGAN :WLSNC NA
+ ZURICH FINANCIAL ADDED TO MERRILL’S LYNCH `EUROPE 1′ LIST
+ DANSKE BANK RAISED TO `NEUTRAL’ FROM `REDUCE’ AT UBS
+ LINDT & SPRUENGLI RAISED TO `NEUTRAL’ AT CREDIT SUISSE
+ WIMPEY RAISED TO `OVERWEIGHT’ AT MORGAN STANLEY
+ EADS RAISED TO `OUTPERFORM’ VS `NEUTRAL’ AT CREDIT SUISSE
+ BBVA RAISED TO `BUY’ FROM `HOLD’ AT ING

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** US MARKETS **
Dow 1,83%; Nasdaq 2,79%; S&P 2,12%; Soxx 4,15%; Russel2k 3,54%; DJAIG 2,08%;
10yr Bond -0,3%; 10yr Yield 5,1%; Crude future 69,8; Gold 575,75

| Energy 3,54%| Materials 3,19%| Technology 2,63%| Financials 2,2%| Industrials
2,13%| ConsDisc 2,11%| Telecom 2,01%| Utilities 1,35%| Healthcare 1,32%|
ConsStaples 0,81%

** US HEADLINES **
- U.S. Shares Rise the Most in a Year as Recovery From 7-Month Low Quickens
- Stocks, Emerging Markets Rebound Worldwide; Commodity, Metal Prices Climb
- Jobless Claims, Manufacturing Reports Ease Concerns About Slowing Economy
- Treasuries Fall, Extending Rout, as Reports Suggest Growth Remains Strong
- Bear Stearns Earnings Jump 81 Percent on Fixed Income and Equity Trading
- Bernanke Warns High Crude Oil Prices May Slow Growth, Spur Price Increase
- Selected Airline Fares Increased $50 Each Way by Six Largest U.S. Carriers
- Gold Investors, Betting on a Price Recovery, Buy More Gold-Backed Shares
- Natural Gas Prices Surge a Second Day as Supply Increase Trails Forecast
- Millennium Pharmaceuticals Says It Ended Sale Talks; Shares Rise on Report

** US: IN PLAY TODAY **
- Microsoft announced that effective July 2008, founder and Chairman Bill
Gates will transition out of a day-to-day role in the co to spend more time on
his global health and education work at the Bill &Melinda Gates Foundation. The
co announced a two-year transition process to ensure that there is a smooth and
orderly transfer of Gates’ daily responsibilities, and said that after July 2008
Gates would continue to serve as the company’s chairman and an advisor on key
development projects.

- Oracle (+6.5% after hours) preannounced Q4 results above consensus and prior
guidance. Co sees Q4 non-GAAP EPS of $0.29 (consensus $0.27), up from prior
guidance of $0.26-0.28, and expects non-GAAP revenue to grow 22% to $4.94 bln,
exceeding previous guidance of 10-14% growth.

- Adobe ( -3.8% after hours) Reports Q2 (May) earnings of $0.31 per share, $0.01
better than the Reuters Estimates consensus of $0.30; revenues rose 28.1%
year/year to $635.5 mln vs the $644.9 mln consensus. Co issues downside guidance
for Q3, sees EPS of $0.25-0.27 vs. $0.29 consensus; sees Q3 revs of $580-610 mln
vs. $627.64 mln consensus. Co issues downside guidance for FY06, sees EPS of
$1.20-1.25, down from previous guidance of $1.26-1.30 vs. $1.26 consensus; sees
FY06 revs of $2.54-2.60 bln, down from previous guidance of $2.7 bln, vs. $2.64
bln consensus.

- Carnival Corp releases earnings. Further today is quadruple witching, meaning
markets could see even higher volatility!

- From the macro front we’ll see Q1 Current Account figures at 14:30 CET
followed by Michigan Consumer Sentiment at 15:45 CET

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** 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 7-Month 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

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