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30-Mar-09 TESTING
The UK hosts the G20 meeting on Thursday which will be feared given the motivation to come up with some international rules for
the financial sector and the bonus polemic. In the end, the summit should result in relatively little of any substance. Indeed, it may reveal
more differences than points of common ground, whether that be how best to regulate markets, clamp down on tax havens, or re-
invigorate the global economy. Despite calls in some quarters for a coordinated fiscal boost, national leaders are unlikely to show
willingness to commit to extra spending in an international forum. What’s more, while UK Prime Minister Gordon Brown may like the idea
of other governments spending more to prop up global demand, the UK has little further scope to help out. Indeed, the Prime Minister’s
enthusiasm appears to have waned of late in response to Bank of England Governor Mervyn King’s recent comments about the state of
the UK’s public finances and apparent reticence on the part of the Treasury.
On the data front, the focus this week will be the health of the US labour market on Friday, and the ECB meeting on Thursday
which should decide to cut rate another 0.5%. Aside from the employment report, the main release this week is the ISM manufacturing
index on Wednesday. The markets will be looking for any further signs that the recession might be easing. In Asia, a ll eyes will be on the
Bank of Japan’s quarterly Tankan survey of business conditions (Wednesday). This will doubtless show that business conditions
worsened further in the first quarter, but probably not by as much as the markets currently anticipate. In the UK, t he key releases this
week cover obviously household borrowing out today.
Also, it will be interesting to see whether the equity indices are able to hold their recent gains, as this week marks an important
switch from Q1 to Q2, with some fading selling flows from hedge funds which mostly fulfilled their commitments in term of redemptions,
and gave the money back with some little left over due end of next June, and at the same time, some traditional fund managers purchase
needs, heavily cash invested and who could not participate to the latest rise at a time when they had to write reports, with a too little
visibility in term of fundamentals anyway. Some improving macro data (or just stabilizing ones) is enough to show that the Great
Depression scenario is no longer the one , Hitler is not coming back, the housing sector is holding reasonably well all around Europe and
finding a floor in the US thanks to some very attractive yields, while deflation is still not showing up, and inflation will be next threat once
things are over.
The saving rate slide is good news. The breakneck adjustment in the state of US households’ finances that had seen the personal
saving rate jump from zero to 4.4% in just six months stalled in February, with the saving rate slipping back to 4.2% according to data
released on Friday. Although the 0.2% rise in spending may sound poor, it is much better than the sharp falls seen towards the end of last
year. And even the 0.2% drop in real terms is a stark improvement – the 3 month annualised rate has picked up from minus 4.3% in
December to minus 0.8%. Clearly a fall in the saving rate driven by a better performance of spending is a good thing. Real consumption
will probably record a gain in Q1 as a whole, once more gradually confirming that economic activity reached a floor mid Q1
It's been 7 months since the Lehman fall, and both the Chinese and the US stimuli are reaching the real economy, banks are
making money back again, confidence is gradually coming back, and rents remain expensive meaning there is a window in investing in
properties as the Central Banks are artificially supporting yield markets which will not last for ever, especially as things are getting better.
The housing steadiness is economically important since this was the reason for the Tsunami. A four months (mid October - mid February)
economic heart attack has made some heavy damages, especially as economic activity was already sliding down since 2 years in the US
weighting heavily on the worldwide activity. But same as the Christmas time 2004 Tsunami, human nature is strong and recovers quickly.
Most of you have already been visiting Maldivian and Thailand places where everything was devastated no so long ago, with no
guarantee though it won't happen again. Things are getting better, same as for these holidays, just don't think to much and jump in, as a
positive dynamic is taking place, which will lead to some new valuations which will prove to be attractive once things are fully back on
track. Last week comments from Korean chip makers were probably the biggest news. Yes Q4 and Q1 GDPs are disastrous, but mostly
because output stalled, with firms liquidating inventories to get whatever cash needed. Any economic stabilization is enough to boost
output sharply, and the chip makers comments that by June there will be a shortage is already a leading indicator of what may well occur
in the US at least . Chinese stimulus was the one to reach the economy the fastest. Europe will obviously profit from these positive signs,
and hopefully has not been hit as hard on the housing front anyway.
Again Geithner yesterday reminded the US officials would not give up, and would ask for more TARP of necessary, while Obama
added the issue of bonuses can distract from the administration's larger goals of jump-starting economic growth and stabilizing the
financial system. In a second Sunday interview, on NBC's "Meet the Press, Geithner said that a bigger danger would be government
action taken on an insufficient scale. "The big mistake governments make in financial crises is to sit back, hope it's going to work itself out,
put the brakes on too quickly, not act aggressively enough, and we can't afford to make that mistake," he said.
The Gap closure on the Eurostoxx cash index will remain the focus for the week (2176/2193). Any signs of stabilisation, lower volatility,
will be seen a positive and a boost to make fund managers jump in.
WTI €/$ $/¥ 10 yr US 10 yr Euro Basic Energy Financ Health Tech Tel Indus Utilities SOX S&P NAS DOW Close

Last 51,2 1,3205 97,25 2,72 3,09 -2,78 -2,85 -3,38 -1,07 -2,68 -0,75 -2,53 -1,61 -2,08 -2,03 -2,63 -1,87 US
Perf 1d % -4,72 -0,62 0,64 -3,81 bp -4,4 bp -2,10 -2,39 -1,23 -0,44 -2,23 -0,95 -1,75 -1,56 -0,98 -1,39 -1,65 -1,51 Europe
ECONOMIC DATA with impact
Bank of England February mortgage approvals (8.30 GMT)
Euro area Consumer confidence (10.00 GMT)
POSITIVE IMPACTS
BT may write down another £300 m on troubled assets at its global services unit (The Mail on Sunday) / The company may also cut its
dividend by nearly 50% on its annual accounts due in May.
LLOYDS is believed to have hired DBK to run a review of its key insurance businesses (The Independent)
LSE is in talks with Financial Technologies (India) to buy a stake in its stock exchange arm MCX-SX (Business Standard)
FIAT : M. Obama's administration intends to provide Chrysler with $6bn & 30 days to finalize an alliance with Fiat (Associated Press)
BG Group has appointed advisers and is expected to make an offer Friday for Oranje Nassau, the £500 m North Sea oil producer put up
for sale by Wendel (Sunday Times)
ALLIANZ is on track in the Eastern Europe and Asia-Pacific regions and expects to grow at an above-average rate in emerging markets,
even in the short term, but at a moderate level (Euro am Sonntag) / The company has no takeover plans in the 2 regions
GERMAN INDUSTRY : Qatar plans to invest in the German automotive & high tech industry (Emir of Qatar Sheik Hamad)
CARREFOUR : To read in Barron’s : “A Crossroads For Carrefour” (Barron’s sees some see reasons for optimism)
AIR BERLIN : Turkey's Sabanci family bought a 15.3% stake in the company (U.S. billionaire Blavatnik had sold his 18.9% stake in Air
Berlin in January, leaving the market guessing who bought the holding) / Separately, Air Berlin agreed on a cross-shareholding of up to
20% in TUI Travel's TUIfly, as previously announced
THYSSENKRUPP is looking for a partner in North America (CEO in FTD)
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30-Mar-09 TESTING
GSK & SANOFI (Minor) are separately in talks with to acquire a stake in Shantha Biotech (India) from Merieux Alliance (Economic Times)
/ Merieux Alliance, which holds an 80% stake in Shantha Biotech is looking to sell its entire stake for around €170m
GDF SUEZ has gone to Belgium's constitutional court to recover a €250 m tax imposed on nuclear power generators by the Belgian govt
NEGATIVE IMPACTS
UBS is weighing further writedowns of at least €1.5bn (Die Tageszeitung's) due to round of writedowns at the bank’s CLO
HRX : The German govt will take a 8.7% stake as a prelude to acquiring full control / HRX lost €5.38bn before tax in 2008 + expects to
remain in the red for at least 2 more years / German govt denied report that there were plans to merge HRX with CBK's unit Eurohypo
PEUGEOT’s board ousted CEO Christian Streiff, saying a change in leadership was needed to "unlock the group's potential" / He will be
replaced by Philippe Varin, former chief executive of steelmaker Corus
DAIMLER will compensate its Chinese JV $980m for capital & operation losses after it sold over 80% of its stake in Chrysler (China Biz)
VALEO has been weighing whether to raise its share capital to help weather the global car crisis but has not taken a final decision…
EADS : “The military transport aircraft A400M can't be built under the current conditions” (CEO of Airbus in Der Spiegel)
BELGACOM-MOBISTAR : The Belgian government has decided to proceed this year with the sale of a 4th mobile telecoms licence
FORTIS has decided, exceptionally, to postpone its General Shareholders' Meeting from 23 April on a date to be decided.
SPANISH BANKS : The regional savings bank Caja Castilla-La Mancha will be backed by €1.4bn of public money (ABC newspaper) /
This is the first banking rescue in Spain since the financial crisis began…

GM : CEO Rick Wagoner plans to step down from his post (Bloomberg) / Separately, The U.S. taskforce overseeing the restructuring of
the auto industry said the plans submitted by GM and Chrysler failed to show how they could be viable… / Obama’s Administration
officials, briefing reporters ahead of a speech Monday morning by President Obama, said a "quick and surgical" bankruptcy may be each
company's best chance for survival…
GE’s chief executive of GE International said he is seeing "glimmers of hope" in the world economy (FT)
RESULTS DIVIDENDS EVENTS
Today Porsche / Banco Popolare / Banca Italease / ASML (€0.20) / Philips Electronics (€0.70) / DSM (€0.80)
Tuesday Fortis / Marks & Spencer sales / Neopost / Maurel & Prom
Adobe AGM / Volvo AGM / Stora Enso AGM /
Wednesday US car sales
TeliaSonera AGM / FedEx investor meeting
Thursday RIM / Monsanto / Micron Tech Volvo (SEK 2.00) / Telia Sonera (SEK 1.80) / Nordea Bank AGM /
Acerinox ( €0.10) / Nordea Bank ( €0.20) / Svenska Neste Oil AGM / Merck KGaA AGM / TIM
Friday Givaudan sales
Cellulosa AB (SEK 3.50) AGM / MAN AG AGM
TRADING IDEAS
Buy the dollar to play US recovery
Buy a house to take opportunity if artificially low long term yields and lowering mortgage rates
Buy equity indices, with a strong confirmation whenever the gap on the Eurostoxx is closed and passed (2176/2193 on the cash index)

BUY ROCHE / MUNICH RE / L OREAL / EON / LAFARGE on reversal Head & Shoulder
BUY ACCOR / AIR FRANCE / NESTLE / UNILEVER / PERNOD on double bottom possibility
BUY NOKIA / BBVA / BNP / AXA to play gap closure above soon

BUY EON / SELL RWE // BUY PFIZER / SELL SCHERING // BUY BNP / SELL DBK // BUY MUV2 / SELL ALLIANZ // BUY LINDE / SELL AIR LIQUIDE

BROKER METEOROLOGY

DEUTSCHE BOERSE ............ RAISED TO OVERWEIGHT FROM EQUALWEIGHT .................................................... BY JP MORGAN

HSBC...................................... RAISED TO OUTPERFORM ...................................................................................................... BY KBW
BANCO SABADEL ................ REMOVED FROM EUROPEAN LEAST PREFERED LIST ......................................................... BY UBS
TELENOR............................... RAISED TO BUY FROM HOLD........................................................................................ BY CITIGROUP
FRANCE TEL ......................... RAISED TO BUY FROM HOLD.................................................................................................... BY RBS
VODAFONE............................ RAISED TO BUY FROM HOLD.................................................................................................... BY RBS
LAND SECURITIES ............... RAISED TO BUY FROM NEUTRAL..................................................................... BY GOLDMAN SACHS

PEUGEOT ....................................CUT TO UNDERPERFORM FROM NEUTRAL ............................................ BY BANK OF AMERICA

CADBURY ....................................CUT TO UNDERWEIGHT FROM NEUTRAL............................................................ BY JP MORGAN
BANCO MONTE PASCHI ............CUT TO SELL FROM HOLD ........................................................................... BY DEUTSCHE BANK
BARCLAYS ..................................CUT TO SELL FROM HOLD ..........................................................................................BY SOC GEN
PHILIPS ........................................CUT TO SELL FROM HOLD .........................................................................................BY SOC GEN
RBS ..............................................CUT TO UNDERPERFORM MARKETPERFORM................................................................. BY KBW
TELIASONERA ............................CUT TO SELL FROM HOLD ...................................................................................... BY CITIGROUP
RWE .............................................CUT TO HOLD FROM BUY ........................................................................................ BY CITIGROUP

PLEASE FIND BELOW ON THE NEXT PAGE OUR MORNING ECO

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30-Mar-09 TESTING
CHART OF THE DAY
Japanese Industrial production (YoY)
since 2004

10
5
0
-5
-10
-15
-20
-25
-30
-35
-40
2004 2005 2006 2007 2008 2009

Source: Bloomberg

Japanese industrial production fell for a fifth month in February, the longest losing streak since 2001, as exports collapsed.

ECONOMIC DATA
Time Country Indicator Period GE forecasts Consensus Previous
United Kingdom Nat'wide house prices March -1,5%,-18,1% YoY -1,8%,-17,6% YoY
00.50 GMT Japan Industrial production (preliminary) February -9,1%,-38,1% YoY -10,2%,-31,0% YoY
05.00 GMT Japan Vehicle production February -41,0% YoY
09.30 GMT United Kingdom Net consumer credit February 0,4 billion 0,4 billion
09.30 GMT United Kingdom Mortgage approvals February 34 000 31 000
10.00 GMT Euro area Consumer confidence March -34 -33
10.00 GMT Euro area Economic confidence March 65,4 65,4
15.30 GMT United-States Dallas Fed Manuf. Activity March -45,0% -57,3%

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

DJIA 7776,2 6,87% - 11,40% EUR/USD 1,3208 -3,06% -5,41%
S&P 500 815,9 6,21% - 9,67% EUR/JPY 127,96 3,05% 1,21%
Nas daq 1545,2 6,05% - 2,02% USD/JPY 96,87 -0,10% 6,60%
CA C 40 2840,6 1,77% - 11,73% Oil Price % 5 Days Ytd
DA X 4203,6 3,31% - 12,61% Brent $/b 50,4 -3,18% 20,86%
Eur os tox x 50 2118,8 3,31% - 13,44% Gold Price % 5 Days Ytd
DJ 600 177,2 2,72% - 10,68% Gold $/oz 925,1 -1,55% 4,86%
FTSE 100 3898,9 1,54% - 12,07% Rates USA Euro Japan
Nikkei 8316,7 9,50% - 6,13% Central Banks* 0,25 1,50 0,09
Shanghai Comp 2349,1 4,09% 29,01% Overnight 0,10 1,01 0,09
Sens ex ( India) 9773,2 12,08% 1,31% 3 Months 0,14 0,71 0,25
MICEX ( Rus s ia) 815,3 2,93% 31,60% 10 Y ears** 2,72 3,09 1,33
Bov es pa ( Bras il) 41907,3 4,57% 11,60% *US: Fed Funds; Jap: Overnight; Euro: Ref i
** Euro: German Bund rate So urc e : B lo o m berg
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30-Mar-09 TESTING
ECONOMIC DATA PREVIEW
No major economic data are due in the United-States

Keep an eye in the euro area on the final of the economic confidence and on the consumer confidence due 10.00 GMT both are
expected to decline as recession is deepening in Europe. Recession should pursue its trend in the euro area till the third quarter of
2009 , meaning that economic and consumer confidence should remained weak till then ./JB

ECONOMY

UNITED-STATES : PERSONAL INCOME DROPPED AND PERSONAL SPENDING GROWTH SLOWED IN FEBRUARY
After dropping of 0.2% in December and rising of 0.2% in January (revised from +0.4%) U.S. personal income dropped of 0.2% in
February . The last month rise did not last as American household income are particularly hit by the increase of unemployment and by
the rise of job destructions. Indeed the unemployment rate should reach 8.2% in March its highest level since 1982. Meanwhile
Americans consumer’s spending slowed from 1.0% in January to 0.2% in February as their confidence remained near a three
decades low this month and as prices are still increasing in the United-States (0.4% in February).

FRANCE : THE FINAL RELEASE OF THE FOURTH QUARTER GDP CONFIRMED THE SHARP CONTRACTION OF THE FRENCH ECONOMY
After reaching a 0.1% at the third quarter despite the fact that most of the economic indicators were down , the French GDP as
expected sharply declined of 1.1% (forecast -1.2%) at the fourth quarter confirming the drop of the national GDP. Despite this little
correction between the forecast and the release the French GDP is reaching 0.7% in 2008 year and will start 2009 with a “growth
gain” of -0.8%. Like the euro area the French economy will have to wait roughly 6 month till the third quarter to see the first sign of a
recovery.

UNITED KINGDOM : RECESSION IS WORSED THAN ESTIMATED ON SPENDING SLUMP

The United Kingdom contraction at the fourth quarter was deeper than expected at - 1.6%,-2.0% YoY ( preliminary released was
-1.5%,-1.9% YoY). Recession is indeed worst than expected as consumer spending and construction slumped the most since 1980.
The United Kingdom is facing its sharpest recession ever as the credit crunch is cutting household demand and as the global
economic downturn is humping demand for U.K. goods abroad./JB
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30-Mar-09 TESTING
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
30/03/2007 30/09/2007 30/03/2008 30/09/2008 30/03/2009 30/03/2007 30/09/2007 30/03/2008 30/09/2008 30/03/2009
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
30/03/2007 30/09/2007 30/03/2008 30/09/2008 30/03/2009 30/03/2007 30/09/2007 30/03/2008 30/09/2008 30/03/2009
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
30/03/2007 30/09/2007 30/03/2008 30/09/2008 30/03/2009 30/03/2007 30/09/2007 30/03/2008 30/09/2008 30/03/2009
Source : Bloomberg Source : Bloomberg
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30-Mar-09 TESTING