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Interesting week ahead with a combination of earnings releases, important macro events, and possible leaks of the stress test.
Earnings will be important as it will keep on providing more visibility, more intense in Europe this time. The US Q1 GDP and the FOMC on
Wednesday will be the focus, while the Case Hiller index tomorrow and the Personal income and spending as well as the PCE on
Thursday will be seen as minor. The official stress test announcement is due out next Monday. Short week on most markets due to Labor
Day in Europe. Denmark, UK, US and Japan will be opened on Friday, other markets such as Euronext, Italy, Spain, Switzerland, Finland,
Sweden & Norway being closed. To be honest, the GDP might not be so important, as we already know through most corporate
comments that the activity has been stabilizing in March, wherever in the abyss it was playing in January and February. The GDP will be
seen as “the check please”, which fund managers start to play nice but surely with a non stop buying flow we do attend since early April.
They can’t play anymore, and have to be market neutral seen the disastrous recommendations from most analysts and strategists so far
this year : bear market rally, cash is king, buy defensive such as Telecom and Pharma, forget banks and Retailers, hum…
The housing sector in the US seem to be on a bottoming process. After falling for 20 straight months, the FHFA house price index
has now risen for two months in a row. One rise could easily be a blip in an otherwise downward trend. But two forces us to consider
more seriously whether the housing market downturn has finally come to an end. What’s more, they come alongside evidence that activity
may have finally found a floor. Despite the modest drop in existing and new home sales in March, they remains above their trough.
Mortgage applications for home purchase and housing starts have also risen above their lows. Moreover, a little known survey of the
amount of work on architects’ drawing boards has increased sharply in the past few months. This may be particularly significant because
commissioning an architect is usually the first stage of the home building process. Indeed, it seems to be a fairly reliable lead indicator of
mortgage applications for home purchase. It is perhaps not too surprising that households are being tempted back into the market when
the combination of the fall in house prices seen over the past two years and the recent plunge in mortgage rates means that housing is
more affordable now than at any point since the 1970s, in addition to sharply lower energy prices.
Corporate borrowing costs fell this week to the lowest since October amid signs that government efforts to repair broken credit
markets are working. The extra yield investors demand to own corporate debt instead of Treasuries fell to 698 basis points as of
yesterday from the December peak of 896 basis points. That represents an average yearly company savings of $19.8 million for every $1
billion of bonds sold. A main reason for that being the amount of cash that was revealed by most corporate last week when releasing
earnings, not really looking like a Great Depression level, but more like some immunization against it…Interbank lending spreads fell to
the lowest this week since before the collapse of Lehman, signaling efforts by the Fed to repair broken credit markets may be working.
The difference between the London interbank offered rate and the expected average federal-funds rate over the next three months,
known as the Libor-OIS spread narrowed to 0.87 percentage point today, matching the difference on Sept. 12. Lehman filed for
bankruptcy protection on Sept. 15, prompting the spread to widen to 3.64 percentage points on Oct. 10. Former Fed Chairman Alan
Greenspan said in June that the Libor-OIS spread was the best way to tell when lending returned to “normal.” He said it would need to
narrow to about 25 basis points, or 0.25 percentage point, for that to happen.
As expected, the stress test results to banks did not bring anything bad, while the top economic officials of the world's seven biggest
nations say they are taking the necessary steps to get the global economy back on track and that growth should begin to recover later this
year. According to the methodology, the 19 banks were asked to project estimated losses on loans, mortgage securities and other
packaged products, including off-balance sheet positions estimated for 2009 and 2010 based on the adverse forecast in a "stressed
economic environment." They were instructed to project losses for 12 different categories of loans and securitized loans. The banks were
also asked to consider credit losses, due to failure of borrowers to pay obligations. The Federal Reserve said banks estimate that they
can bring on $900 billion in assets onto their balance sheets based on revised asset valuations in light of new Financial Accounting
Standards Board valuation guidelines. The report also said that bank regulators can add roughly $700 billion to their risk-weighted-
assessment of bank capital. The report did say banks did have capital levels "in excess" of the amount required to be well capitalized,
however it added that losses from the recession have "substantially reduced the capital for some banks." Under the adverse criteria,
unemployment rate is at 10.3% at the end of 2010 and a 3.3% contraction in the U.S. economy in 2009 and a 0.5% growth in 2010.
Investors back from holidays will welcome such an improving newsflow and jump in. The Eurostoxx cash index will break the
2342 reached last Monday before the consolidation, and obviously 2358 to head toward the expected 2608 temporary target.
WTI €/$ $/¥ 10 yr US 10 yr Euro Basic Energy Financ Health Tech Tel Indus Utilities SOX S&P NAS DOW Close

Last 50,4 1,3171 96,71 2,95 3,19 4,55 2,86 2,48 0,37 2,52 -0,40 2,32 -0,32 1,72 1,68 2,55 1,50 US
Perf 1d % 2,38 -0,54 0,47 -4,11 bp -3,1 bp -1,03 0,69 0,08 0,63 -0,90 0,24 -0,39 -0,02 -1,43 0,03 -0,71 0,03 Europe
ECONOMIC DATA with impact
2358 level on the cash Eurostoxx, when broken would lead to 2608 level
POSITIVE IMPACTS
PORSCHE : Qatar's Emir seeks to buy a stake in Porsche (Focus magazine)
DEUTSCHE BANK may report tomorrow a Q1 ROE of 25% (Handelsblatt)
ALSTOM won €1 bn contract for the construction of UK's largest combined cycle power plant
CARREFOUR is holding talks with Reliance Retail, Aditya Birla Retail and Spencer's Retail Ltd. on a possible partnership (livemint.com)
BMW and DAIMLER, which already cooperate in developing hybrid engines and purchasing, are seeking to expand their cooperation into
financial areas as well (Auto-motor-und-sport)
RWE and VATTENFALL have been invited by Venture Production to bid for it as Venture tries to fend off an approach from CENTRICA
AVIVA : Q1 life & pensions sales of £9.57bn (8.44bn exp) / IGD solvency surplus £2.5bn at 31 March after DPS / Intends to offer
scrip dividend to shareholders for 2009 / Significantly enhanced capital position
BMPS : The 2009 net interest income for BMPS is estimated unchanged on the year or slightly lower (Il Sole 24 Ore) / Monte dei Paschi
will boost its Tier 1 ratio to 7.2% thanks to state-sponsored convertible bonds
BREWERS : Japanese brewer Kirin agreed a $2.5 bn buy-out of Lion Nathan (Australia's #2 brewer) paying a near 50% premium
NEGATIVE IMPACTS
GERMAN BANKS : COMMERZBANK may have risky assets of €101bn, including €49bn stemming from the takeover of Dresdner Bank
(Sueddeutsche Zeitung) / Newspaper added DBK has €21bn risky assets, DPB €5bn & HRX €268bn / Overall, German banks are sitting
on illiquid and toxic assets in a volume of €816 bn
AIRLINES-TRAVEL : The outbreak of swine flu in North America could hurt shares of airlines and transport companies and those with
Mexican exposure / PHARMACEUTICAL sector should be well supported…
MERCK : Q1 rev. €1.90bn (1.83bn e) / Operating €198m (217m e) / Is convinced liquid crystals business has reached its trough in Q1
BAYER said phase III trial of Nexavar in chemotherapy-naïve patients with advanced melanoma does not meet primary endpoint
ARCANDOR : The state of North Rhine-Westphalia is considering issuing state guarantees to help ARO to shore up its finance (E am S)
RWE : The parliament of Dutch province North Brabant (Essent’s biggest shareholder) voted against RWE's planned purchase of Essent
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27-Apr-09 SPRING BREAK

BNP - FORTIS : Ping An said it will vote the the breakup of Fortis when shareholders meet on Tuesday / Fortis will be suspended from
trading on Euronext Brussels as of April 28 & will resume following the publication of a statement by Co
FERROVIAL may not get the Regulatory Asset Base value of £1.6 bn for Gatwick coz of credit rating concerns over the bids (S. Tel)
SOCIETE GENERALE denied a newspaper report that it wrote down €5bn in assets last year as a result of trading at SGAM Alternative
Investments unit and was left with a similar amount of toxic products…
TELECOM ITALIA : Argentina has approved a local investment group's purchase of an extra 2% stake in Sofora, the company that
controls Telecom Argentina, dealing another setback to Telecom Italia
SCHNEIDER plans to make 7K employees in France go on leave for an average of nearly 20 days this year (La Tribune)
PPR : 7 unions called on PPR’s workers down tools on Tuesday to protest against lay-offs
SNAM RETE GAS begins its capital increase operation, which runs until May 15 / Rights issue priced at €2.15 per ordinary share
HYPO REAL ESTATE : J.C. Flowers has not decided yet whether to accept the German government's €1.39-per-share offer for
HRE shares / It rejected as "nonsense" a report that Flowers had asked for €8 per share in talks with the government.

RESULTS DIVIDENDS EVENTS

Atlas Copco / Scania / Merck KGaA / Nippon Steel / Verizon Lufthansa (€0.70) / Eiffage (€1.20) / Heineken
Today
/ southwestern Energy (€0.34)
Tuesday BBVA / BP / Sandvik / Theolia / Pfizer / Sun Micro Bouygues (€1.60) Fortis EGM
ArcelorMittal / royal Dutsch Shell / Sanofi-Aventis / SAP /
Siemens / Bayer / Continental AG / Volkswagen / France
Aegis (GBp 1.711111) / Akzo Nobel (€1.40 ) /
Wednesday Telecom / Geberit / Nordea Bk / Norsk Hydro / ST Micro Fortis EGM / Allianz AGM
Nestlé (CHF 1.40) / Sandvik (SEK 3.15)
(after US close) / General Dynamics / American Electric
Power / Time Warner
AstraZeneca / BASF / BG group / B Sky B / Cap Gemini /
Technip / Scor / Dassault Systemes / Lufhansa / Edison / Allianz (€3.50) / Credit Suisse ( CHF 0.10) /
Thursday AXA AGM / Deutsche Tel AGM / BASF AGM
Ferrovial / Novo Nordisk / Kellogg / Motorola / Safeway / Danone (€1.20) / Ahold (€0.18)
Eastman Kodak / International Paper
Friday Chevron
TRADING IDEAS
An eye on Eurostoxx & Nasdaq cash index downside gap left on 2111 & 1599 levels
BUY Cars ahead of RENAULT & DAIMLER results this week + fund managers underweight cyclical names + good Monthly car registration lately +
boosted by gvt help
BUY DANONE / UNILEVER looking good & BUY AHOLD / GSZ on double bottom possibility
BUY OIL names as TOTAL / ENI / BP / ROYAL DUTCH to play the economic recovery
BUY MUNICH RE / NESTLE / L OREAL / VIVENDI / SIEMENS / PERNOD on reversal Head & Shoulder possibility

BUY L OREAL / SELL CARREFOUR // BUY PEUGEOT / SELL DAIMLER // BUY AHOLD / SELL METRO // BUY BNP / SELL SOCGEN
BROKER METEOROLOGY
CADBURY ............................RAISED TO NEUTRAL FROM SELL ........................................................................................... BY UBS
EDF .......................................RESTARTED BUY ................................................................................................................ BY MERRILL
3M .........................................RAISED TO EQUALWEIGHT ........................................................................................... BY BARCLAYS
ASTRAZENECA ...................RAISED TO BUY FROM NEUTRAL ............................................................................................. BY UBS
NOVO NORDISK...................RAISED TO BUY FROM NEUTRAL .............................................................................................. BY CITI

CAP GEMINI .........................CUT TO NEUTRAL FROM OVERWEIGHT ................................................................................ BY HSBC

SCHNEIDER ELECTRIC .......CUT TO NEUTRAL FROM OVERWEIGHT ................................................................................ BY HSBC

PLEASE FIND BELOW ON THE NEXT PAGE OUR MORNING ECO

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27-Apr-09 SPRING BREAK

CHART OF THE DAY

German IFO expectations and GDP in volume
Since 1992
a/a,
5

105
4

100
3

95
2

90
1
Avril
85 0

80 -1
T408
75 -2
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Perspectives d'activité de l'enquête IFO - G - PIB en volume - D -

Source : Bloomberg

The German IFO expectations increased for a fourth month in a row to reach the level of 83.9 in April, their highest level since
September 2008 just before the peak of the financial crisis. After reaching a bottom at the fourth quarter 2008 and certainly at the first
quarter 2009, the year on year German GDP should progressively recover to reach positive territory starting at the fourth quarter 2009.

ECONOMIC DATA
Time Country Indicator Period GE forecasts Consensus Previous
27-30 April United Kingdom Nat'wide house prices April -1,2%,-15,7% YoY 0,9%,-15,7% YoY
7.10 GMT Germany GfK consumer confidence May 2,3 2,4
15.30 GMT United States Dallas Fed Manufacturing activiy April -42,0 % -49,0%
17.00 GMT France Total jobseekers March 2 384 000

Inde x e s P rice % 5 D a ys Ytd Forex Price % 5 Days Ytd

DJIA 8076,3 - 0,63% - 7,98% EUR/USD 1,3175 2,00% -5,67%
S&P 500 866,2 - 0,36% - 4,10% EUR/JPY 127,39 -0,81% 0,64%
Nas daq 1694,3 1,28% 7,44% USD/JPY 96,69 1,17% 6,32%
CA C 40 3102,9 0,85% - 3,58% Oil Price % 5 Days Ytd
DA X 4674,3 - 0,05% - 2,83% Brent $/b 50,1 2,46% 19,90%
Eur os tox x 50 2319,9 - 0,25% - 5,22% Gold Price % 5 Days Ytd
DJ 600 195,8 - 0,21% - 1,28% Gold $/oz 915,3 3,43% 3,71%
FTSE 100 4156,0 1,67% - 6,27% Rates USA Euro Japan
Nikkei 8704,0 - 2,24% - 1,76% Central Banks* 0,25 1,25 0,11
Shanghai Comp 2410,1 - 2,21% 32,36% Overnight 0,05 0,64 0,11
Sens ex ( India) 11346,3 2,78% 17,61% 3 Months 0,10 0,77 0,20
MICEX ( Rus s ia) 923,0 - 0,98% 48,98% 10 Y ears** 2,95 3,19 1,46
Bov es pa ( Bras il) 46771,8 1,62% 24,56% *US: Fed Funds; Jap: Overnight; Euro: Ref i
** Euro: German Bund rate So urc e : B lo o m berg
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27-Apr-09 SPRING BREAK

ECONOMIC DATA PREVIEW

No major economic data due in the United-States.

Watch in France the total jobseekers for March due at 17.00 GMT, expected to increase as companies are forcing to cut jobs as they
are facing weak domestic and foreign demand due to the global economic downturn./JB

ECONOMY

UNITED-STATES : NEW HOMES SALES EXCEEDED FORECAST IN MARCH

Purchases of new home sales in March revealed to be higher than expected . Indeed the new home sales which were expected to reach
337 000 dropped from 358 000 ( revised from 337 000) in February to 356 000 in March representing a very slight drop of 0.6%. The
Federal Reserve effort to bring mortgage rates down combined with tax credits for first time buyers are impacting positively U.S. new
home sales. Sales remained 7.6% over there level of January ( 331 000) and the real estate sector still hit by the high level of
unemployment is slowly recovering. As the global financial and economic crisis starts with the real estate downturn this sector should be
one of the first to recover.

UNITED-STATES : DURABLE GOODS ORDERS FELL LESS THAN FORECAST IN MARCH

After a drop trend since September 2008, U.S. durable goods orders rebounded to rose of 2.1% in February 2009 ( revised from 3.4%).
Unfortunately a point do not make a trend a this increase did not last. Indeed orders for U.S. made durable goods fell of 0.8% in March
(forecast -1.5%). If we look to the breakdown non - defence capital goods orders (ex aircraft) increased 1.5% last month following a rise
of 4.3% in February which represent a positive advanced indicator of investment . Meanwhile durable goods shipments fell 1.7% ,
transport fell 1.4% and durable goods inventories fell by 1.1% in March. Durable goods ex transportation after increasing of 2.0% in
February ( revised from 3.9%) dropped of 0.6% (forecast 1.2%). We can say that these data remains encouraging as they show that the
severity of the recession is easing. We can expect the economy to start recovering this summer led by the drop of interest rates, the
revival plans and the stabilization around $ 50 of the barrel price.

UNITED KINGDOM : THE GDP DROPPED MORE THAN EXPECTED AT THE FIRST QUARTER
The GDP in United Kingdom dropped of 1.9% at the first quarter which is more than what was expected by the consensus -1.5%. The
GDP in United Kingdom already dropped of 0.7% at the third quarter and of 1.6% at the fourth quarter showing that the country is facing
a deep recession. Furthermore the Year on year GDP data reached -4.1% the lowest data since the fourth quarter of 1980. This said
this data is not as bad as it seems as it do not represent an historical low in the United Kingdom. Indeed at the third quarter of 1979 the
GDP dropped of 2.4% and during the recession of 1979-1980 the GDP fell reach 5.9%. For the future we can say that the drop of the
interest rate, the budgetary revival plan and the drop of the sterling are very strong signed of a recovery in 2009 in the United Kingdom.

GERMANY : IFO BUSINESS CLIMATE REACHED ITS HIGHEST LEVEL SINCE NOVEMBER 2008 IN APRIL
After almost two year in a row of constant drop the IFO business climate gained 1.5 pts in April. With a level of 83.7, this advanced
indicator of the German GDP reached its highest level since November 2008. If the IFO business climate remained at a low level and do
not gauge an immediate recovery it is showing that ground floor as been reached. This analysis is confirmed by the new increase of the
IFO expectations which are increasing for a fourth month in a row to reach the level of 83.9 their highest level since September 2008 just
before the peak of the financial crisis. The year on year German GDP should progressively recover to reach positive territory starting at
the fourth quarter 2009.

FRANCE: CONSUMER SPENDING ROSE IN MARCH

After increasing of 1.7% in January led by the sales and after dropping of 1.8% in February, French consumer spending rose of 1.1% in
March (forecast 0.2%). Moreover except a slight drop in household goods of 0.5% almost all sectors are increasing significantly. Starting
with textile/leather (+3.5%) after dropping of 8.0% in February and increasing of 4.5% during January sales. Presented as a sector
significantly affected by the global economic downturn the car sector rose for the fourth month in a row to reach 2.9% in March and 8.4%
on this period of time. All these goods news are generating despite all expectations a positive variation of the French consumer
spending of 0.4% at the first quarter. Even if the consumption of manufactured product account for only 24 % a the French total
consumption these positive data will limited the drop of the GDP at the first quarter which should reach -0.4%./JB
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27-Apr-09 SPRING BREAK

VIXindex: impliedvolatility onthe S&P 500 $Libor -3-Month(InterbankRate)
6
85
80 5,5
75
5
70
65 4,5
60
55 4
50
3,5
45
40 3
35
30 2,5
25
20 2
15 1,5
10
5 1
27/04/2007 27/10/2007 27/04/2008 27/10/2008 27/04/2009 27/04/2007 27/10/2007 27/04/2008 27/10/2008 27/04/2009
Source : Bloomberg Source : Bloomberg

UnitedStates : 10-year Treasury yield 10-year Treasury spreadUSA-Eurozone

5,5 1,2
5,25 1
5
0,8
4,75
0,6
4,5
4,25 0,4
4 0,2
3,75
0
3,5
3,25 -0,2
3 -0,4
2,75
-0,6
2,5
2,25 -0,8

2 -1
27/04/2007 27/10/2007 27/04/2008 27/10/2008 27/04/2009 27/04/2007 27/10/2007 27/04/2008 27/10/2008 27/04/2009
Source : Bloomberg Source : Bloomberg

Oil : Brent ($/b) Forex: Eurovs Dollar (EUR/USD)

150 1,65
140
1,6
130
1,55
120
110 1,5
100
1,45
90
1,4
80
70 1,35
60
1,3
50
40
1,25

30 1,2
27/04/2007 27/10/2007 27/04/2008 27/10/2008 27/04/2009 27/04/2007 27/10/2007 27/04/2008 27/10/2008 27/04/2009
Source : Bloomberg Source : Bloomberg
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