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19-Jun-09 TELL ME WHEN

Starting the week badly with a feeling that inflation might spoil the stimulus put in place, we end it with some feeling that
inflation coming from commodity prices rise is being tampered by other deflation influence, making both PPI and CPI very friendly
data after all. G8 finance ministers tried to cool inflation fears in saying they would cool off the monetary and fiscal stimulus, in order to do
a break to the latest long term yield rise which might have been a threat to the coming fragile economic recovery. It worked, although it
also brought some doubts on the timing and the strength of the recovery which equity indices played on the downside as there was no
real further motivation to climb higher at a time when fund managers are writing their H1 reports while option gamma players can't be as
active as they used to be in this supposed to be heavy quarterly expiry. Treasuries were knocked sharply lower yesterday though, but
after the Treasury Department announced a series of auctions for next week. The auction will carry amounts that exceed what was
expected, which pressured the benchmark 10-year Note and sent its yield up above 3.8%. Still off the 4% reached on the top of the yield
rebound, remaining some decent and attractive historical levels, which will hardly head higher given the recovery pace expected soft.
One important driver of the recent increase in commodity prices has been coming from China. Aluminium imports for April and
May were up over 400% y/y in volume terms, while copper imports have also risen by around 100% y/y. In both cases, inventory levels in
the country have risen sharply in recent months. Loan growth continues to soar and reported urban fixed investment was up 39% y/y last
month. Chinese economy should be supported by huge domestic stimulus which aims are setting up internal growth properly, fitting with
the strong urbanization move and a better health care system. As a reminder until 2011 the stimulus put in place is an equivalent of a
Hong Kong and NY City new construction per year.
The Philly Fed activity index out yesterday jumped to a 10-month high of -2.2 in June, from -22.6, suggesting that manufacturing
output may be close to finding a floor. Indeed, aside from a brief spike up to +1.9 in September last year, this is actually the best
reading since November 2007, just before the economy officially entered recession. The details of the survey were equally as
encouraging as the headline index. New orders jumped to minus 4.8, from minus 25.9, while shipments improved to 2.1, from minus 19.0.
The only disappointment is that the improvement in the employment index was more modest. It remains firmly in negative territory, at
minus 21.8 compared with minus 26.8 in May. Both the prices paid and received balances strengthened, suggesting that manufacturers
are having some success in passing on higher commodity prices.
A recovery is on track in the US, but the lack of interest from market players in these levels given the latest sharp rebound from
March lows is making next month an interesting one when the Q2 earnings will valid the economic improvement from a top bottom logic.
Option expiry today might be disappointing so much we trade away from strike levels requesting hedging positions. The lack of protection
though on the upside once the expiry is over from long only fund managers and others trading players might trigger a nice and bullish run
which will send equity indices on new highs starting today.

Finland and Sweden closed today

WTI €/$ $/¥ 10 yr US 10 yr Euro Basic Energy Financ Health Tech Tel Indus Utilities SOX S&P NAS DOW Close

Last 71,7 1,3945 96,68 3,80 3,55 0,57 -0,22 2,07 2,21 -0,45 0,39 -0,07 2,18 -1,84 0,84 -0,02 0,69 US
Perf 1d % 0,07 0,32 -0,13 -2,32 bp 6,6 bp 0,97 -0,10 1,68 1,95 -0,48 0,85 -0,37 1,46 -1,76 0,70 -0,26 0,71 Europe
ECONOMIC DATA with impact
Option quarterly expiries : Footsie 9h50-10h / 11h UK time Eurostoxx / 12h Dax / 15h CAC / single stocks on the close
POSITIVE IMPACTS
ENEL will complete the cash and assets deal to acquire 25% of ENDESA from ACCIONA on June 25
CONTINENTAL / PIRELLI : Conti expects worldwide demand for passenger car tyres to grow to nearly 1.25Bn units next year from the
1.2 bbn units it expects this year,
EON is close to a sale of its THUEGA subsidiary, which could fetch between €3.5Bn & 3.8 Bn (FTD)
SEMICONDUCTORS : The semis industry's global rev will resume sequential growth from Q2 & exceed year-ago levels by Q4, U.S.
research firm iSuppli forecast
ALSTOM & SCHNEIDER may join forces in a bid to buy the Transmission and Distribution subsidiary of AREVA (Les Echos)
PRUDENTIAL is expected to confirm it has unloaded its Taiwan agency business after receiving regulatory approval for the transfer to
China Life Insurance this week (FT) / FT said the transfer would free £800m of cash to add to Pru's £2bn surplus reported in May
CBK plans to back out of Switzerland by selling its local private banking unit (FAZ)
UBS is in talks with Indian IT Cos over a possible sale of its business and knowledge process outsourcing units in Poland and Hyderabad
(the Economic Times) / The UBS India Service Centre and the center in Poland is valued at around $200m, newspaper added
SPANISH BANKS : The Bank of Spain will control a proposed €99bn bank restructuring fund and have final say on mergers following
interventions (sources)
BBVA ‘Colombian subsidiary Net prfit is expected to grow around 12% this year thanks mainly to containment of operating costs, the
head of BBVA Colombia said. "Slower economic growth will be compensated with a sharp reduction of expenses"
AXA wants international accounting rules changed to better reflect insurers' LT obligations but industry players warned against making
rules more opaque
KBC: Imterim Ceo says "Fundamentals of its franchise remain solid"
NEGATIVE IMPACTS
IBERDROLA could be eyeing larger rights issues or an acquisition as a means of making it difficult for core shareholder ACS to raise its
stake in the company./ Separatly 250 m new shares to start trading today in the Spanish marke
DAIMLER : L-T corp credit cut to BBB+ from A- by S&P
SANOFI lost a U.S. court ruling in its bid to prevent Novartis ’s Sandoz unit & Hospira Pharma from selling a generic
version of the colon cancer treatment Eloxatin.
DANONE lost a Chinese appeals court ruling in a dispute with Wahaha over ownership of the Wahaha trademark.
PORSCHE: 9M sales –15% (€4.64bn) / Confirms won’t reached FY08 results in 2009/ Reliable f’cast for 09 not possible / Increased
refinancing costs hit pretax earnings
DEUTSCHE BANK ‘CEO Ackermann has warned that a small circle of globally dominant banks may emerge from the economic crisis.
"The question for the future will be: How large can a bank be, in relation to the economic power of a country, that it isn't too big to fail?" he
said. He cited the danger of an evolving oligarchic banking structure involving a handful of banks after the crisis ends
RIM (losing 6% after session) posted Q1 esp 098cts vs 0.94 expected and a $3.42 bn revenue in line, added 3.8 m customers (3.7-3.9
range expected), but expect Q2 esp to be between $0.94 to 1.03 which brackets the $0.97 per share currently expected, 3.6 revenue (=)
RESULTS DIVIDENDS EVENTS
Acciona AGM / Homebuilders at Bank of
Cadbury strading statement / Centrica /
Thursday GE ($0.31) America / eBay AGM / Telecom Italia board
Irish Life
meeting / Deutsche Boerse investor day
 WWW.GLOBAL-EQUITIES.COM / DEL SARTE / + 33 (0) 1 44 43 33 24

19-Jun-09 TELL ME WHEN

BSCH AGM / Telenor capital market day /
Friday Heinz ($0.415) / Gamesa (€0.23)
Toyota AGM / Valeo AGM
Monday Enel (€0.29) / Finmeccanica (€0.41) / Tenaris ($0.25)
Alstom AGM / WPP AGM / General Electric &
Applied Materials at Deutsche Bank conf /
Tuesday Kroger
Utilities conf at Bank of America / Tech conf at
UBS / Alternative Energy conf at Deutsche Bank
Brisitsh Energy (GBp 15.11111) / Compass group (GBp4.444444) /
BB&B / Nike / Oracle / RIM / Monsanto /
Wednesday United Utilities (GBp 34.966667) / Marks & spenser (GBp 0.38) / Kraft
General Mills
food ($0.27)
TRADING IDEAS
BUY FINANCIAL as BNP / AGRICOLE / DBK / SOC GEN / MUNICH RE on double bottom possibility
BUY ENERGY names as TOTAL / ENI / REPSOL / EDF / GSZ / ENEL on recovery
BUY DANONE / NESTLE / PERNOD on reversal Head & Shoulder & VINCI / CARREFOUR / DAIMLER / FRANCE TEL on double bottom

BUY GLAXO / SELL ASTRA // BUY LAFARGE / SELL HOLCIM // BUY ALLIANZ / SELL AXA // BUY DAIMLER / SELL BMW
BROKER METEOROLOGY

CHARTER ..................... RAISED TO NEUTRAL FROM SELL .................................................................................................. BY UBS

BSKYB ........................... RAISED TO BUY FROM NEUTRAL .................................................................................................... BY UBS
CARPHONE ................... RAISED TO BUY FROM HOLD .......................................................................................................... BY RBS

KINGFISHER.................. CUT TO NEUTRAL FROM BUY .......................................................................................................... BY UBS

INDITEX .......................................CUT TO SELL ........................................................................................................................ BY UBS

PLEASE FIND BELOW ON THE NEXT PAGE OUR MORNING ECO

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19-Jun-09 TELL ME WHEN

CHART OF THE DAY

Homebuyer Affordability Composite index in the United-States
Since 1990
0

180

170

160

150

v 140

130

120

110

100
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Source : National Association of Realtors

The Homebuyer Affordability index is reaching historical high since the beginning of 2009, showing that American households are now
ready to get back on the real estate market.

Time Country Indicator Period GE forecasts Consensus Previous

0.50 GMT Japan Bank of Japan to release Board Meeting Minutes
7.00 GMT Germany Producer prices May 0,0%,-3,6% YoY -1,4%,-2,7% YoY
7.45 GMT France Wages (final) First quarter + 0,8% QoQ + 0,8% QoQ
9.00 GMT Italy Unemployment rate First quarter + 7,3% + 6,9%

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

DJIA 8555,6 - 2,45% - 2,52% EUR/USD 1,3945 -0,50% -0,18%
S&P 500 918,4 - 2,79% 1,67% EUR/JPY 134,76 2,34% 5,96%
Nas daq 1807,7 - 2,93% 14,63% USD/JPY 96,65 1,89% 6,18%
CA C 40 3194,1 - 4,22% - 0,74% Oil Price % 5 Days Ytd
DA X 4837,5 - 5,28% 0,57% Brent $/b 70,3 -0,82% 68,27%
Eur os tox x 50 2414,4 - 4,28% - 1,36% Gold Price % 5 Days Ytd
DJ 600 205,6 - 4,24% 3,67% Gold $/oz 934,2 -0,50% 5,96%
FTSE 100 4280,9 - 4,01% - 3,46% Rates USA Euro Japan
Nikkei 9747,8 - 2,78% 10,03% Central Banks* 0,25 1,00 0,11
Shanghai Comp 2878,0 2,18% 58,06% Overnight 0,20 0,73 0,11
Sens ex ( India) 14428,0 - 7,39% 49,56% 3 Months 0,17 0,70 0,20
MICEX ( Rus s ia) 1021,0 - 9,95% 64,79% 10 Y ears** 3,81 3,55 1,47
Bov es pa ( Bras il) 50903,0 - 4,70% 35,56% *US: Fed Funds; Jap: Overnight; Euro: Ref i
** Euro: German Bund rate So urc e : B lo o m berg
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19-Jun-09 TELL ME WHEN

ECONOMIC DATA PREVIEW

No economic data are due in the United-States

Watch in Germany the Producer prices for May, due at 07.00 GMT, expected to remained stable at 0.0%after dropping by 1.4% in
April. Meanwhile from a year ago German’s producer prices are expected to go deeper into negative territory mainly due to a “base
effects” as producer prices rose by 0.9% in May 2008 versus 0.0% expected in May 2009.

ECONOMY
UNITED-STATES : INITIAL JOBLESS CLAIMS SLITHLY ROSE AND CONTINUING CLAIMS STOP CLIMBING
Initial jobless claims in the united-States seems to have reached a ground floor as they rose at a slower pace and should stop increasing
in a near future. Indeed weekly Initial jobless claims rose from 605 000 to 608 000 last week. Meanwhile after rising for almost a year,
th
and breaking new historical high record, continuing claims slightly dropped from 6 835 000 to 6 687 000 May 5 showing that the worst
seems to have past on the labour market which is slowly but surely recovering.

UNITED-STATES : CONFERENCE BOARD LEADING INDEX ROSE FOR A SECOND STRAIGHT MONTH IN MAY
The Conference Board leading index rose increase 1.2% (forecast 1%) in May after rising by 1.1% in April. This is the biggest back to
back gain since November-December 2001. This encouraging data of the Conference Board index reflecting the direction of the
economy over the next three to six months is another sign that the recession is now slowing down. Indeed the last U.S. economic data
are showing encouraging economic outlook like the drop of 46% of jobs destruction, the rise of the ISM manufacturing index, the
increase of the retail sales, the rebound of housing starts and building permits and the rise of the household consumption and more
generally the rebound of household consumption. The rise of the leading economic index is surely another sign of the progressive
recovery of the U.S. economy.

UNITED-STATES : U.S. PHILADELPHIA FED INDEX JUMPED TO A TEN MONTH HIGH.

The Philadelphia Fed index jumped to a ten month high by -2.2 in June from -22.6 in May. This other encouraging data is suggesting
that the manufacturing output is near to have reached a ground floor. Looking at the breakdown the new orders jumped to -4.8 from -
25.9, shipments improved to 2.1,form -19 but the employment index remained disappointing remaining in negative territory at -21.8.
Nevertheless its important to notice that most of these balance of the breakdown main figure remained in negative territory suggesting
that the activity is still contracting./JB
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19-Jun-09 TELL ME WHEN

VIX index : implied volatility on the S&P 500 $Libor - 3-Month(Interbank Rate)
6
85
80
5,5
75 5
70
65 4,5
60 4
55
50 3,5
45 3
40
35 2,5
30 2
25
20 1,5
15
1
10
5 0,5
19/06/2007 19/12/2007 19/06/2008 19/12/2008 19/06/2009 19/06/2007 19/12/2007 19/06/2008 19/12/2008 19/06/2009
Source : Bloomberg Source : Bloomberg

United States : 10-year Treasury yield 1,2 10-year Treasury spread USA-Euro zone
5,5 1
5,25
0,8
5
4,75 0,6
4,5 0,4
4,25
0,2
4
3,75 0
3,5 -0,2
3,25
-0,4
3
-0,6
2,75
2,5 -0,8
2,25 -1
2 19/06/2007 19/12/2007 19/06/2008 19/12/2008 19/06/2009
19/06/2007 19/12/2007 19/06/2008 19/12/2008 19/06/2009
Source : Bloomberg Source : Bloomberg

Oil : Brent ($/b) Forex : Euro vs 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
19/06/2007 19/12/2007 19/06/2008 19/12/2008 19/06/2009 19/06/2007 19/12/2007 19/06/2008 19/12/2008 19/06/2009

Source : Bloomberg Source : Bloomberg