Cantor Morning News | Morning @ Cantor

� FX:�� The pound weakened, approaching the lowest level against the dollar in 10 months, as data showed a house-price recovery may lose traction and Moody�s Investors Service said U.K. banks� creditworthiness may be at risk.

� FX:�� The JPY was firmer throughout the session.

� FX, Rates:� The 3-month Libor yield advantage of the JPY over the USD, a historical anomaly, which since mid-August last year lent extraordinary buoyancy to the JPY, has at long last disappeared. That, in combination with the fact that JPY repatriations come to an end by the end of the Japanese fiscal year on March 31, provides reason for expectations that the JPY will weaken starting in April� � which should prove stock market supportive � Uwe Parpart

� FX:�� Investors expect 5% appreciation in Yuan in next yr � BBG

� Rates:�� China says it will keep buying US debt � FT

� Rates:� fall in US today

� Rates:� Auctions

o this weeks Treasury auctions will start with $40Bln 3 year notes.

� Rates:�� 2�s 10�s Treasuries is testing resistance of 283.5, which defines the near term flattening trend. A NY session trade of 284.5 is required to reverse the trend to steepening, in alignment with the intermediate term trend.�� Dennis Cortes

� NY Fed official Brian Sack suggested that balance sheet will shrink in a "gradual and passive" manner. Moreover, he allowed for possibility that excess reserves drain may not see the balance sheet reach pre-crisis levels, with the system functioning smoothly despite the bloated asset levels.� TTN

� Rates:�� German government bund yields traded near their highest in more than a week and Greece�s 10-year bond rose on optimism that international support will help avert a Greek debt crisis, damping demand for the safest assets.

� �The buzz word of the day was �EMF� and the mere idea that has been floated around helped support spread products,�� - BBG

� Rates�� U.S. 10-Year Swap Spread Won't Go Negative, RBC Capital Says: Chart of Day

o ��The 10-year swap rate, near its lowest level in over two� decades, won't slip below the yield on similar-maturity� Treasuries as trading related to corporate debt issuance slows - BBG

� Rates:�� Yields on Fannie Mae and Freddie Mac mortgage securities that guide U.S. home-loan rates fell to the lowest relative to Treasuries on record, even as the scheduled end of Federal Reserve purchases approaches.

o The difference between yields on Washington-based Fannie Mae�s current-coupon 30-year fixed-rate mortgage bonds and 10- year Treasuries narrowed 0.02 percentage point yesterday to about 0.63 percentage point to match the smallest spread since at least 1984

� Rates� Japan�s government bonds rose, pushing 30-year yields down to the lowest in five weeks, after a sale of 600 billion yen ($6.6 billion) in the debt drew stronger demand than the market expected - BBG

� Data mixed at best overnight

o UK Trade deficit widens and not seemed weather related

o The Royal Institution of Chartered Surveyors said the number of real-estate agents and surveyors saying prices rose exceeded those reporting declines by 17 percentage points, lagging behind the 30-point gap predicted in a Bloomberg survey of economists

o Strong set of economic data from Australia - markets eye this Wednesday's Aussie jobs report.

o February ANZ Job Advertisements rose 19% - the largest expansion since at least 2004

o Multi-year high rate of growth in Australia job advertisements lifts short end of govt bond yields

� Gold:� China's FX regulator downplays speculation of diversifying holdings into gold � TTN

� IMF's Strauss-Kahn commented in a speech that China's CNY currency was undervalued and he expected changes in CNY currency in the coming months

� China;� SAFE comments that interest rate levels may be relatively high helped the Property Index in Shanghai gain nearly 3%.� � TTN

� China;�� PBOC Vice Gov Su reiterated its commitment to accommodative "relatively loose" policy for the rest of 2010, also noting that current liquidity levels are sufficient for further gains in Chinese equities� � TTN

� Jobs:� Second-Quarter Hiring Plans in U.S. Stable, Manpower

� M&A:�� Mall owner General Growth Properties has bolstered its case for exiting from bankruptcy as a stand-alone company by lining up nearly $4 billion in commitments from creditors Fairholme Capital Management and Pershing Square Capital Management

� M&A:�� MOELLER MAERSK (-1.82%) is rumoured to be interested in acquiring Greece-based group DryShips. Shares in the Nasdaq-listed company jumped 7.6% yesterday � S&P

� EU:� financials rotated lower following Moody's commentary that UK banks that have yet to secure funding could see ratings cuts as governments

� China;�� Fitch retained its negative outlook on the German based insurance sector in a move the lowered related names.

� Tech:� CSCO conf today in focus on big internet anncmt� , stk up 3.5% yesterday - videocast at 11am et today

� Tech:�� TXN:� UPs Outlook AS Expected, HIGH BAR GOING IN.. LOWER LEAD TIMES UNNERVES STREET ;� orders strong

� EU:� Tech related plays have traded better throughout the session following improved guidance from US based Texas Instruments [TXN] that came from the groups mid-quarter update

� EU:�� Defensive food producers are firm

� EU:�� Pharma stocks rebound from yesterday's fall

� WEIR (+5.65%) raises its FY10 guidance,

� H&R Block..HRB dn 5% after hrs�.reported�Mgmt did not reinstate� guidance that it withdrew Feb 24 � street worried about five remaining weeks of tax season!! Recall gave interim results Feb 15 ;� client adds don�t impress

� EADS shares dn 5% - �results that missed analyst estimates; scrapping its dividend

� copper producer� Antofagasta Plc� dn 2% - reported results that missed analyst estimates

� BA trades up this am:� Northrop and EADS to Drop Bid for Tanker;� leaving its rival, Boeing, as the likely winner of one of the Pentagon�s largest contracts.� BBG

� Hyundai Heavy forecasted slow recovery in orders going forward,

� Russia�s biggest steelmaker� Severstal dn 3% - Posts Unexpected Loss on Currency, Tax

o ��Severstal�s Russian steel and mining divisions were profitable, while its overseas steel operations remain dilutive,�� BBG

� CMA�� COMERICA BEGINS OFFERING OF $800M COMMON STOCK

o Outside largest institutions, USB, PNC, BBT and now CMA are the large regional lenders that have pursued/ completed TARP repayment

� H&R Block..HRB dn 5% after hrs�.reported�Mgmt did not reinstate� guidance that it withdrew Feb 24 � street worried about five remaining weeks of tax season!! Recall gave interim results Feb 15 ;� client adds don�t impress

� Yikes!!� TM:� Calif. Prius Nearly Crashes After Gas Pedal Fails

o High-speed Toyota driver rescued by California Highway Patrol

o A California Highway Patrol helped stop a runaway Toyota Prius after the car�s accelerator became stuck at high speed.

o http://wjz.com/consumer/california.Prius.stuck.2.1546681.html

� Obama Turns Up the Volume in Health Care Bid - NYT

o In a high-octane appearance that harked back to his �yes we can� campaign days, Mr. Obama jettisoned the professorial demeanor that has cloaked many of his public pronouncements on the issue, instead making an emotional pitch for public support as he tries to push the legislation through a final series of votes in Congress in the next several weeks.

� Healthcare, Student lending:� Dem plan to pair health reform, student lending complicates vote

o http://thehill.com/homenews/senate/85595-dem-plan-to-twin-healthcare-and-student-lending-complicates-vote-

� Undecided committee chairmen add to pressure on healthcare reform vote

o http://thehill.com/homenews/house/85599-undecided-chairmen-add-to-pressure-on-health-vote-

� Fed speakers include:

� Chicago Fed President Evans speaks to the Nat'l Assoc for Business Economics 2010 Economic Policy Conference at 09.30 ET

� Earnings:

o Companies reporting before the bell: KR

� Sovereign Risk stories :

� Fitch stated that the US was vulnerable to an interest rate shocks but saw no pressure on its "AAA" sovereign credit ratings in the short/medium term. It added that large "AAA" rated countries have exceptional funding flexibility

� Supply has been the dominant theme in European debt markets today. France launched a new 50 year OAT (lead managers BarCap, BNP, JP and SocGen) while Finland and Belgium both have opened books on syndicated offerings of their own. Austria and the Netherlands conducted auctions without any hiccups to report, while the UK DMO sold �3B in 12 year gilts with a healthy cover ratio above 2. - TTN

� President Barack Obama meets today with Greek Prime Minister George Papandreou

� After a meeting with Papandreou yesterday, Secretary of State Hillary Clinton said he didn�t ask for financial help. The Greek leader also will consult with congressional leaders and Treasury Secretary Timothy F. Geithner - BBG

� In a speech at the Washington-based Brookings Institution yesterday, Papandreou said the Greek crisis posed a financial risk to the U.S. � BBG

� Greece to Press U.S. to Crack Down on �Speculators� (BBG)

� Moody�s Investors Service said U.K. banks� creditworthiness may be at risk.

o �Banks may have their financial-strength ratings cut as state support is withdrawn, Moody�s

� Fitch Ratings Says U.K. Needs to Make Stronger Fiscal Adjustment

� Fitch saying Portugal may be downgraded- BBG ;� spain macro risk remain high�

� Fitch saying Greece bailout was too uncertain to be factored into ratings

� Fitch Says Portugal May Be Downgraded If Measures Insufficient

� Father of Euro warns on Italy � BBG

o Mundell Says May Not Be Need For a European Monetary Fund: �I don�t know if I would immediately jump ahead to create a new institution. I think you need to find more informal ways of solving this problem.�

o Mundell Says Euro Is �Best Thing� That Happened to Europe

o Robert Mundell, a Nobel laureate in economics for his work on exchange rates, said speculators are �a big problem for Greece.�

o MUNDELL DOESN'T SEE A EURO-AREA COUNTRY DEFAULTING

� European monetary fund??�� Merkel warns of hurdles in EMF plan

o Radical plans for a European version of the International Monetary Fund to bail out crisis-hit countries would need a new treaty and the agreement of all European Union member states, Angela Merkel, Germany�s chancellor, has warned

o http://link.ft.com/r/KC2844/26CQY7/X82E2/QFTXZE/1868HC/W1/h

� European monetary fund??�� European Central Bank Executive Board member Juergen Stark hasn�t �fully appreciated� the proposal for a lender of last resort for Europe, said Deutsche Bank AG Chief Economist Thomas Mayer, who suggested such a fund.� BBG

� Euro Area Won�t Break Up, OECD�s Padoan Tells Handelsblatt

� France said today it will hire banks to sell at least 3 billion euros of 50-year bonds for the first time in five years

� Dubai:� Dubai World�s Chief Restructuring Officer Aidan Birkett held talks with HSBC Holdings Plc in London yesterday to outline proposals for the state-owned holding company�s debt restructuring, The National reported

� Dubai: �Nakheel Bond Rises to Month High on Dubai World Debt Talks � BBG

� Dubai:�� JPMorgan Sees 20% Haircut, 10-Year Extension on Dubai World Debt

� IMF Opposes Ukraine Central Bank Refinancing Plan, Delo Says � BBG

� -- The International Monetary Fund�s Managing Director Dominique Strauss-Kahn said devaluing the rand is a �short-sighted view� to solve South Africa�s economic problems. � BBG

TODAY�S BIG STORIES

� Equity Wrap:

o S&P futures traded in an extremely narrow range of only 5.50 points today; it was, in fact, it was the tightest range for all of 2010 .

o Meanwhile the VIX spent its second day below 18, not far off the January 11th low of 16.86; it has been lower for 15 of the past 17 sessions. Add to this a Bloomberg story detailing mutual fund cash levels at their lowest level since 2007, and we have three good reasons (quiet markets, extreme complacency and a lack of cash) for contrarian investors to adopt a more cautious stance. Perhaps investors are waiting to see how more of the macro issues play out.

o Meanwhile, on this side of the Atlantic, the Fed continues to prepare markets for its upcoming balance sheet reduction (and liquidity mop up). It will use reverse repos through the money market mutual fund complex as a primary tool to drain a portion of the excess liquidity injected during the crisis. It has made test runs totalling about $1B in what could be an operation many hundreds of times that size.

o stocks have now recouped almost all of the 8.1% mini correction begun in mid January. This makes 1147, the high close for 2010 (also the contract high), an extremely important level.

o M&A news continues:� MET will pay about $15.5B for Alico, a unit of AIG, while Shell Oil and Petro China announced a joint $3B bid for Arrow energy of Australia. In a "take under", IUSA agreed to be acquired by CCMP for $463M (IUSA fell 3% on the news). MSCC sweetened its bid for SSTI by 5c to $3.05; the market last Friday seemed to be hoping for more (SSTI fell 5.2% on the news). For more info on these and other situations in the arb space, contact Mike Maresca (908-517-5070) or Scott Schefrin (212-829-4966).

o It was another quiet day with really nothing to motivate clients one way or another.

o There were a few pieces out during the day, one that old us how the vanilla institution is up to they're gills in stocks with not much more room to invest and then later in the day another piece on how the hedge fund world just got a bunch of new money(allot of that is earmarked for debt and other instruments as well as they don't tell you how guys are still finishing paying they're guys back for 2008

o Some clients we talk to, everyone is as committed as they are going to be and you might get some tweaking here or there but most beds have been made and people are just waiting for a confirmation on the part of the economy before doing anything else.

o We have seen some frustrated shorts covering, vanillas rounding out small but for the last few days,� seen some people selling stocks across the board.

o Technically, this market still grinds higher in spite of having the kind of volume most are looking for that would make them feel people.

o Breadth to the market had advancing issues outnumbering declining issues by 1 1/2-1 while internally here, sell names outnumbered buy names by 1 1/2 -1, albeit very quiet

o Telecom the best performing sector:

o Retail outperforms again

o Managed care pullback:

� Billy Clark and desk

� Treasury�s Wrap:

o An extremely quiet session in Treasuries. The market from open to close tradied in a tight range on very light volume. Treasuries opened up lower and steeper as this weeks supply both in Treasuries and Investment Grade weighed down on the market. Treasuries grinded to slightly higher prices in the late morning settling into a tight range for the entire afternoon session. At 3PM Treasuries finished mixed with the short end slightly higher in price and the intermediate to long end lower. 2/10s steepened by 3.3bps to 282bps.

o this weeks Treasury auctions will start with $40Bln 3 year notes.

o Primary Dealer

� high yield Wrap: dramatic build-up of the new issue calendar � PN; CDX HY 13 up 1/8 pt Monday

o Garda World Security Corp. started off a new week in the high-yield primary market on Monday by pricing a two-part offering of seven-year notes denominated in U.S. and Canadian dollars.� (PN)

o Many new deals in mkt this week:� Boise, Amstead, International Coal, Parker and Stena deals are all expected to price sometime this week.� .� (PN)

o Harrah�s rises on CMBS amendment; Harrah�s Operatings bonds were seen up multiple points, some in very active trading, after the Las Vegas-based gaming giant announced that it had gotten approval from lenders to extend the maturities .� (PN)

� Convertibles Wrap:

o Convertibles players were cheered to see two new-issue launches first thing Monday � marking a change from recent weeks in which new issuance has been in the doldrums - PN

o Ciena�s $250 million convertibles bid up to 101 in gray market� - PN

� Investment grade Wrap: also saw a dramatic build-up of the new issue calendar

o DirecTV Holdings LLC, Hasbro, Inc., Bank of America Corp., BNP Paribas, Ameriprise Financial, Inc., Southern California Edison Co., DCP Midstream LLC, CME Group Index Services LLC and Bank of England each sold bonds on a big� Monday - PN

o Secondary IG activity was mixed today as a large new issue calendar took focus.� Spreads tightened 3-5bps as appetite remains unsatiated for paper as new issues came at little or no concessions.� As the best example, DTV 5.875 19 went out Friday +147-142 and the new 10yr came at +150.� Pre-Moody's upgrade to Baa3 from Ba2 last Tuesday the 19s had been +162-157.� Nice run.� All told, it was over $10BN in issuance, very active for a Monday with most deals being up-sized.

o Exisiting paper from DOW 19s (went out +193-188, 7bps better) to PFE 39s (went out +95-90, 5bps better) was bid up and traded well on bwic's today.� Still looking to move our ISRELE 27s at +270/olb and still axed in SIEGR 26s - see Hanauer on both.

o Ratings Changes: DPS - upgraded by to Baa2 from Baa3 by Moody's, left positive MET - outlook to Negative by Moody's; NHP - upgraded to BBB from BBB- by S&P, left stable - see Rick Zuck

o MICHAEL SALEMO

� Emerging markets were �super busy� on Monday as the primary picked up steam and three issuers from the financial world moved forward with planned bond deals. PN

� Deal moves market of asset-backed securities toward recovery

o The European market for asset-backed securities is starting to thaw, with Barclays Capital securitizing �1.4 billion in assets for Alliance & Leicester, a mortgage lender owned by Banco Santander. The deal is the first benchmark-sized transaction to be fully sold to investors since mid-2007. "We are further down the road of seeing pre-crisis structures in the market," said Miray Muminoglu of BarCap. Financial News Online (U.K.) (subscription required) (08 Mar.) , Financial Times (tiered subscription model) (07 Mar.)

� Research indicates use of CLOs will recover in Europe, U.S.

o Moody's Investors Service released data about collateralized loan obligations in Europe and the U.S. showing that the use of CLOs likely will pick up once the loan market recovers. "There is investor interest, but it is down from what it used to be and we have yet to see all the pieces come into place," said Katherine Frey, co-head of European structured finance at Moody's. Financial Times (tiered subscription model) (08 Mar.)

� Spreads on mortgage bonds from Fannie, Freddie hit record low

o The U.S. Federal Reserve is planning to end its purchases of debt at the end of the month, but yields on mortgage securities issued by Fannie Mae and Freddie Mac have continued to decline. JPMorgan Chase said some investors are more interested in the debt at tighter nominal spreads because the expectation for volatility in interest rates has declined. Bloomberg (09 Mar.)

� Fed speak:� Sack Says Fast Sale of Fed Assets Risks Sudden Rise in Rates - BBG

o Brian Sack, the New York Federal Reserve Bank�s markets chief, said reducing the central bank�s $2.3 trillion balance sheet quickly through sales of assets would risk a sudden increase in long-term interest rates

o Instead, a �gradual and passive� decline in assets outlined last month by Fed Chairman Ben S. Bernanke would limit a reversal of the low borrowing costs fostered by $1.69 trillion of securities purchases, Sack said yesterday in a speech in Arlington, Virginia. Bernanke indicated the Fed wouldn�t sell assets until the recovery from the worst recession since the 1930s is �more firmly established,� Sack said.

� Fed Watch: Fed�s Reach May Be Curbed Under Plan

o Several high-ranking members of the Senate Banking Committee have reached a tentative consensus on a plan that would strip the Federal Reserve of regulatory powers over all but the very largest banks, those with more than $100 billion in assets, people briefed on the negotiations said on Monday night

o http://www.nytimes.com/2010/03/09/business/economy/09regulate.html?partner=rss&emc=rss

� Fed Watch: Fed plans to add counterparties when draining money from system

o The Federal Reserve Bank of New York said it will use additional firms "to enhance the capacity of such operations to drain reserves beyond what could likely be conducted through" the Fed's 18 primary dealers. "This is another step in the laying of the groundwork in what will eventually become policy normalization," said Dan Greenhaus, chief economic strategist at Miller Tabak. "The private markets have long known the Fed would have to expand eligible counterparties. It's a good thing in the respect that the Fed recognizes that they have to do this." Bloomberg (08 Mar.)

�

� Jobs:� Second-Quarter Hiring Plans in U.S. Stable, Manpower

o The number of U.S. employers planning to keep staffing levels unchanged held at a record high for a second consecutive quarter, signaling sustained job creation will take time as the economy recovers, a private survey showed

o �Manpower., the world�s second-largest provider of temporary workers, said 73 percent of employers anticipated no change in hiring from April through June, the same as in the first quarter and the highest since the group�s records began in 1972. Sixteen percent of respondents said they anticipated expanding payrolls, while 8 percent projected a decrease.

o �The report adds to evidence that the labor market is stabilizing as the nation emerges from the worst recession since the 1930s � BBG

� Jobs:�� Canada Firms Plan to Add Jobs in Second Quarter, Manpower

� Jobs:�� Are unemployment benefits no longer temporary?� WP

o Millions of Americans have been forced to rely on unemployment payments for extended periods as the nation struggles through its longest period of high joblessness in a generation, and critics are taking aim, saying that the Depression-era program created as a temporary bridge for laid-off workers is turning into an expensive entitlement.

o http://www.washingtonpost.com/wp-dyn/content/article/2010/03/08/AR2010030804927.html

� Jobs:�� Royal Mail reaches pay deal with workers

o Royal Mail lifts one of the biggest clouds over its future with a pay deal for postal workers in which rises are likely to be worth 6.9 per cent over three years and greater job security.

o http://link.ft.com/r/KC2844/26CQY7/X82E2/QFTXZE/8AZACK/W1/h

� China says it will keep buying US debt - FT

o China�s investments in US Treasury bonds are continuing �every day� and should not be politicised, according to the head of China�s foreign exchange administration, which manages the country�s $2,400bn in foreign exchange reserves

o http://link.ft.com/r/KC2844/26CQY7/X82E2/QFTXZE/XTHTUV/W1/h

� ECB's Weber stated that the German economic recovery remained intact and that the global recovery was gaining strength. He added that the recovery was uneven and at different speeds and scales depending on region.� TTN

� Morgan Stanley�s Roach Sees �False Alarm� Over China Bubbles - BBG

o Stephen Roach, the chairman of Morgan Stanley Asia, said he saw a �false alarm� in tales of asset bubbles or an imminent banking crisis in China.

o Roach, who commented in an e-mailed note, said that Chinese authorities recognize that stimulus must be tempered and �have been among the first to implement post-crisis exit strategies.�

� Hedge Funds Pulled in $7.1 Billion in January

o The inflow in January is a very positive sign for the hedge fund industry," said Sol Waksman, CEO of BarclayHedge, the tracking company that compiled the data. "The first month of the year typically delivers a redemption-driven outflow."

o http://www.cnbc.com/id/35763606

� Hedge Funds� New York beats London in luring biggest hedge funds

o Coming out of the recession, New York held onto its position as the world's favorite home for hedge funds, with more than $1 billion in assets under management. London was home to 65 big hedge funds last year, but that declined to 55 this year. During the same period, major hedge funds in New York slipped from 120 to 118. Forbes/StreetTalk blog (08 Mar.) , Telegraph (London) (07 Mar.)

� commodity markets� New money inflow set to make records

o Financial inflows into commodity markets in 2010 should match or beat the record $70bn of new money that was invested last year, according to almost two-thirds of the investors attending the sixth annual Barclays Capital commodity investor conference held in Barcelona last weekend.

o �The results of the survey are a very positive vote of confidence by investors in commodities as an asset class,� said Kevin Norrish, managing director, commodities research at Barclays Capital: �We have found over the six years of the survey that the audience�s response to our questions on their current and planned exposures to commodities have provided a pretty reliable guide to the fortunes of the asset class over the next year.�

o http://www.ft.com/cms/s/0/fedea90e-2aa5-11df-b7d7-00144feabdc0.html

� Japan FX:� Companies may� repatriate as much as 1.5 trillion yen ($16.6 billion) of� overseas profit in March

o `There's a need to� be aware of the high possibility for yen appreciation pressure,� at least on a temporary basis.''� - BBG

� China:� The yuan is facing increased pressure to appreciate as a widening interest-rate differential spurs inflows of funds through "underground money shops,"� China�s top currency regulator said.� BBG

� China:�� Gold �Unlikely� to Be Main China Reserve Investment - BBG

o Gold is �unlikely� to be China�s primary investment to diversify its reserve holdings because of price risks, Yi Gang, head of the State Administration of Foreign Exchange, said today.

o The �gold price has had handsome gains in recent years,� Yi said at a briefing in Beijing today. Still, �if we look at the past 30 years, it had big ups and downs.� China is the world�s largest producer of gold and the second-biggest consumer after India

� China:�� China�s Foreign ETF Plan Signals Market Reform, West China Says - BBG

o China�s plan to introduce exchange- traded funds that track overseas stock indexes signals a push to create more opportunities for investors as the market matures, according to West China Securities

o The Shanghai Stock Exchange will try to introduce exchange- traded funds that track foreign indexes this year

� China thinks expectation of rising yuan will bring capital inflow

o Yi Gang, who leads China's State Administration of Foreign Exchange, said anticipated strengthening of the yuan is likely to attract foreign investment to the country. Cross-border arbitrage funds are likely to pursue opportunities in China because of its relatively high interest rates and possible increase of the yuan, Yi said. Reuters (08 Mar.)

� Protectionism, interrupted :�� Brakes applied to protectionist surge � FT

o The number of new restrictions on international trade has slowed sharply, according to an official study commissioned by the G20 group of governments, suggesting a feared surge of protectionism has not arrived

o http://link.ft.com/r/KC2844/26CQY7/X82E2/QFTXZE/72A2O8/W1/h

� Proposal to create European Monetary Fund draws broad support

o A proposal by German Finance Minister Wolfgang Sch�uble to create the European Monetary Fund was greeted with support from throughout the region. The fund, to deal with monetary problems in the eurozone, would be patterned after the International Monetary Fund. EU Economic and Monetary Affairs Commissioner Olli Rehn said the European Commission is ready to support the proposal. German Chancellor Angela Merkel publicly backed the plan. Spiegel Online (Germany) (08 Mar.) , Google/Agence France-Presse (08 Mar.) , Financial Times (tiered subscription model) (08 Mar.)

� A social vision for the world after socialism

o By John Lloyd

o http://www.ft.com/cms/s/0/4b33ffea-2aef-11df-886b-00144feabdc0.html

� EU climate chief delivers treaty blow

o world will almost certainly fail to draw up a new treaty on climate change this year, the minister in charge of last year�s Copenhagen summit has admitted, delivering a heavy blow to the barely flickering hopes for a swift global �settlement.

o http://www.ft.com/cms/s/0/d4fe86d0-2ace-11df-886b-00144feabdc0.html

� Obama Criticizes Insurers in Bid to Sway Public on Health Plan - BBG

o Obama and his top health official are stepping up attacks on the nation�s insurers as they work to sway public opinion and persuade lawmakers to back U.S. health-care legislation.

o Obama told an audience outside Philadelphia yesterday that insurers have calculated that higher premiums can more than make up for the loss of customers who can�t afford coverage. Health and Human Services Secretary Kathleen Sebelius highlighted her call to insurers to post information justifying their rates

� Immigrant rights leaders critical of Democrats � WP

o Leaders of nearly a dozen grass-roots immigrant rights groups excoriated President Obama and congressional Democrats on Monday, accusing them of moving too slowly to legalize the status of undocumented immigrants and citing a record number of deportations in 2009.

COMPANY NEWS WITH MACRO IMPLICATIONS

� THO Thor Industries reports -� MIXED..EX ITEMS ok.� OUTLOOK ok.� BACKLOGS GOOD.� SOME ON STREET RASIE ESTS.

� FEED: AgFeed Industries guides mixed at best

� FRPT +10.7% (earnings)

� Trading Analysis: Arbitrage is possible under CESR's short-selling rules

o The Committee of European Securities Regulators outlined a plan for a pan-European disclosure regime for short selling. The plan is expected to help level the playing field, but it could also make arbitrage a possibility because discrepancy between nations could be a challenge. "To the extent that national regulators impose extra requirements, there could still be regulatory arbitrage," said Peter Green, a partner at Morrison & Foerster. "But with most shares trades involving international parties, it would be difficult to do much domestically." IFLR.com (09 Mar.)

� Electronic Stock Trading to Boost Share in Asia, Greenwich Says - BBG

o Electronic trading systems will boost their share of Asian equities transactions to 28 percent in the next three years as investors demand speed and lower costs

� Electronic Stock Trading� Tullett hangs on to phone trading

o The interdealer broker says it is 'inconceivable' that over-the-counter trading would move entirely on to pure electronic platforms

o http://link.ft.com/r/KC2844/26CQY7/X82E2/QFTXZE/EWXWMN/W1/h

� Demand:� Hyundai Heavy Expects Global Ship Orders to Drop for Third Year - BBG

o Hyundai Heavy Industries Co., the world�s largest shipbuilder, expects demand for vessels to fall for at least a third year in 2010 as shipping lines pare expansion plans to curb overcapacity

o Shipowners may order about 10 million tons of new vessels worldwide this year, Chief Executive Officer Min Keh Sik said in an interview today in Gwacheon, a city near Seoul. That compares with 18.6 million tons last year and 102.7 million tons in 2008, according to figures from Clarkson Plc, the world�s largest shipbrokers

o �There is nothing to expect in terms of new orders until next year,� Min said. �It will be a slow and marginal recovery.�

� Demand:� China February Car Sales Rise 55 Percent on Stimulus - BBG

o China�s passenger-car sales rose 55 percent in February from a year earlier as consumers responded to extended economic stimulus measures and shopped for vehicles before the Lunar New Year.

� Inflation??:�� Power Recovery to Boost Calpine, NRG Before U.S. Utility Companies Benefit � BBG

o Calpine Corp. and NRG Energy Inc., the biggest independent� power producers in the U.S., may outperform utility shares as� electricity demand recovers, because they'll be able to raise� prices faster.

o Analysts' average price targets indicate Calpine� will rise 19 percent and NRG 21 percent in the next 12 months,� compared with gains of less than 5 percent at such utility� owners as Southern Co. and Duke Energy Corp.

� Inflation??:� Sinopec Shanghai Says China Should Raise Fuel Prices

o China should increase fuel prices to prevent domestic refiners from incurring losses in March and April, said a unit of China Petroleum & Chemical Corp., the country�s biggest refiner.

� M&A:�� SAN.FP Sanofi-Aventis and Merck (MRK) to combine animal health units

� M&A:�� WOR Worthington takeover speculation in trade publication -- Columbus Dispatch;� The SBB article� saying that U.S. Steel (X) might be looking at Worthington.

o The� pledges -- added to $2.6 billion that Canadian property investor Brookfield Asset Management already has agreed to sink into General Growth -- would allow the mall owner to eliminate most of its $7 billion in unsecured debt

o General Growth's board has yet to vote on the proposal.

o ��If BAM moves ahead with this structure, it removes most if not all uncertainty from their previous bid, and removes any doubt to whether it�s credible or not,�� - BBG

� M&A:� �Maersk Says Won�t Comment on DryShips Acquisition Speculation � BBG

� M&A:�� Shell May Need to Increase Arrow Bid, Bernstein Says - BBG

� M&A:�� Marsh & McLennan May Sell Kroll Unit for $1.3 Billion, FT Says

� M&A:�� Energy:�� Shell�s Arrow Bid May Spur Coal-Bed Gas Takeovers - BBG

� M&A, Energy, demand:�� - Total SA, Europe�s biggest refiner, will press ahead with plant sales to reduce oil-processing capacity by about a fifth amid expectations that demand won�t pick up anytime soon.

o �Deals are still possible,� Michel Benezit, Total�s head of refining, said in a telephone interview late yesterday from Paris. �Buyers can be found. It�s a select market so things will take time.�� BBG

� M&A:�� UK Coal not aware of cash proposal from any source �.UK COAL has noted the speculation in Daily Mail

� M&A:�� Energy:� Exxon Lowers Bar, Buys Assets Previously Deemed Unattractive - BBG

o Exxon Mobil Corp., BP Plc and Total SA are investing in assets that previously weren�t worth their time or money after oil-rich nations reduced access to reserves and exploration drilling faltered

o Efforts to find new sources of crude and natural gas are failing more often, with San Ramon, California-based Chevron Corp.�s exploration failure rate jumping to 35 percent last year from 10 percent in 2008.

o Countries such as Venezuela are making it more expensive for companies to develop their resources

� M&A:�� JSDA Reed's (REED) and Jones Soda have entered into a LOI regarding a merger; JSDA announces departure of CEO ($0.84)

� M&A:�� SHANKS GROUP:�� Ends talks with Carlyle after GBP1.20 offer � S&P

� Airlines:� UAUA UAL Corp reports Feb consolidated traffic +2.1% ($17.52)

� Airlines:� AAI Air Tran Holdings reduces Q1 capacity guidance to 6% from prior 7-8% in presentation slides

� Airlines:� AMR Corp attendants to meet with mediators next week; to ask NMB to declare talks at an impasse--Bloomberg

� Airlines: US Airways, Delta Lead Traffic Decline on Storm Cancellations - BBG

o US Airways Group Inc. and Delta Air Lines Inc. led the six largest U.S. carriers to a 1.7 percent drop in February traffic as storms caused thousands of flight cancellations

o US Airways had the widest traffic decline at 4.7 percent, and said the storms reduced its revenue by about $30 million last month. UAL Corp.�s United Airlines said yesterday its traffic slid 0.5 percent in that time, and that the storms lowered revenue by $40 million.

� Airlines:� FINNAIR:�� Says February traffic fell 9.3%

� Airlines:� SKYW SkyWest reports Feb traffic +11.6%; capacity +9.1%

� Airlines:�� Aer Lingus (AERL.ID).. Trading higher post results/

� Autos:

o Toyota's defense against allegations of electrical design flaw was dented by today's instance of a Prius driver losing control of acceleration on a California freeway, pushing the speed of the vehicle to 90mph requiring police assistance� - TTN

o Honda's operating profit from North America operations may rise 150% in current fiscal year - TTN

o �Mazda was said to implement a brake override system in all of its new models. TTN

o China Association of Automobile Manufacturers forecasting a slower pace of China new vehicle sales than 46% seen in 2009 - estimating a natural annual growth rate of 10-15% without govt auto-related stimulus policies - TTN

o Automotive industry, regulators 'too cozy' � WP

� Dozens of former federal officials are playing leading roles in helping carmakers handle federal investigations of auto defects, including those for Toyota's runaway-acceleration problems

o BMW Group Feb sales +14% y/y at 91,758 cars -- Dow Jones

o Audi (VOW.GR) trades lower� reports FY net �1.3B vs Bloomberg �1.57B

� TMT sector news:�

o CSCO conf today in focus on big internet anncmt� , stk up 3.5% yesterday - videocast at 11am et today

o TXN:� UPs Outlook AS Expected, HIGH BAR GOING IN.. LOWER LEAD TIMES UNNERVES STREET ;� orders strong

o CSCO offers remedies in EU review of Tandberg acquisition- BBG

o SNE: to start selling 3-D TVs in June- AP

o SNDK, Wafers: SNDK begins to supply NAND flash wafers, say memory module makers- Digitimes

o PV Module Makers: Taiwan-based PV module makers raise quotes by 2.7-2.8%- Digitimes

o Notebook Makers: Quanta, Wistron and Inventec see February 2010 revenues down on month- Digitmes

o DELL axes 10% of employees at Taiwan Design Center- Commercial Times

o Chip equipment spending to grow 76% in 2010, says Gartner- Digitimes

o LCD panel makers cutting costs to improve profitability, says iSuppli- digitimes

o Chips: IC Insights boosts 2010 chip growth forecast to 27%- EETimes

o GOOG, DISH: Google and Dish Network testing TV search on Android-based set-top boxes- EnGadget

o CVC: DIS, TWC: Cablevision / Disney fight may be more about Time Warner Cable says the NY Post

o http://www.nypost.com/p/news/business/abc_of_tv_battle_time_warner_cable_hoX2npSMMKhlkWD8ZNANBO

o DIOD raises Q1 revenue guidance

o Telefonica eyes group to bid on Mexico fiber optic- Reuters

o CHINA CDC� CHINA +2.9% (earnings),� services biz miss,,�,,outlook OK .

o UMC United Micro reports Feb revenue NT$8.63B vs. prior year NT$3.14BMVIS -4.9% (earnings)

o HOKU up 10% - s $30M second tranche loan

o TIVO +1.8% (earnings).

o DIOD Diodes raises Q1 revenue guidance

o DEUTSCHE TELEKOM:�� In talks to buy clickandbuy � S&P

o EU TMT �trading:� Very,very thin on the ground today: Telecoms outperforming the mkt as profit taking in Banks hits sector

o Vodafone cutting UK workforce by 375 as an ongoing cost saving plan

o Inmarsat FY EBITDA $594.2mln Full Yr revenue $1.038bln and sees good trading conditions in all mkts, however� good news is priced in as stock trading down 2%

o Deutsche Post 09 Revenues 46.2bln euros and q4 net profit 220mln euros in line with estimates

o Google Tests TV Search Service With Dish Network: WSJ

� The service runs on TV set-top boxes containing Google software. In the latest development to combine Internet content with conventional TV, the service will allows users to search content from satellite-TV service as well as video from Web sites like Google's YouTube, WSJ said. It will also allow users to personalize a lineup of shows.

o CVC Cablevision / Disney fight may be more about Time Warner Cable says the NY Post

� http://www.nypost.com/p/news/business/abc_of_tv_battle_time_warner_cable_hoX2npSMMKhlkWD8ZNANBO

� Solar sector:

o JPMorgan downgrades ENER, ESLR, FSLR

o Phoenix Solar Shares Jump� 10 percent After EPS Beats Analyst Estimates

� The German solar park developer, which said earnings before interest and tax in 2009 fell to 12.2 million euros, predicted that profit and revenue this year will grow.

o Centrosolar Group AG gained 2.3 percent to 3.38 euros after SES Research GmbH recommended buying shares of the maker of solar cells

o SOPW Solar Power, Inc. receives initial commitment of $24.7M from Recovery Act funds

� Consumer sector

o HOTELS:� MAR Marriott plans to double number of properties in Europe over the next few years reports the WSJ

o NESTLE (+0.95%) climbs as JP Morgan upgrades the shares to overweight, saying the group is less exposed to the volatility of raw material prices than UNILEVER (+0.55%) or DANONE (-0.37%).

o CASY -4% (earnings)

o ANF WSJ is cautious on Abercrombie & Fitch, slightly positive on Limited Brands (LTD)

o SSI� SSI Stage Stores reports

o MC FP -1.28% LVMH downgraded to mkt perf. vs outperform @ Bernstein

o IMT LN -2.84% rated sell vs neutral @ UBS

o LVMH (-1.34%) suffers a downgrade to market perform at Bernstein.

o Consumer pos?: ��Merlin, the world�s second-largest theme-park owner

� Merlin said last month it was considering all options for future ownership structure, including an initial public offering.

� Merlin Entertainments Group Ltd., the U.K. owner of Legoland and Madame Tussauds, said full-year profit increased 17 percent as it attracted visitors with new rides and attractions at its theme parks. - BBG

o Asia Consumer: ��Want Want gained 11 percent� - climbed the most in almost two years in Hong Kong;� Hl largest maker of rice cakes and flavored milk

o Asia Consumer: ��Lifestyle International Holdings Ltd up 4% ., the operator of Hong Kong�s Sogo stores, rose to the highest in a month on the city�s stock exchange after saying last year�s profit increased 23 percent.

� Financial News

o GGP +2.6% (Fairholme, Pershing investment plan).

o HRB -4.7% (earnings),

o SUSQ -3.5% ($300M equity offering),

o CMA -2.4% ($800M stock offering).

o Moody�s say that UK banks face ratings cuts as aid is withdrawn so Barclays, Lloyds, RBS, HSBC all down between 1 and 2%.

o UBS cuts EPS estimates for Italian Banks, UCG and ISP down 2%

o UBS (-2%) says their share buyback has formally ended.

o FDIC seeks new levy on big banks�� FT

� Sheila Bair, chairman of the Federal Deposit Insurance Corporation, on Monday said that large financial institutions should pay an upfront levy for the costs of their failure, although she signalled willingness to compromise. As regulatory reform talks grind towards a conclusion in the Senate, Bair told the FT that she was still pushing for a pre-funded �resolution authority� to wind down the next Lehman Brothers-style failure, even though the biggest banks faced an additional $90bn tax announced by President Barack Obama.

o Gartmore Group traded up 4.2 percent� ., the money manager that began trading its shares in London in December, posted a profit in 2009 as the company cut its debt.

� ��We are starting to see the positive impact of the changes we have made, notably the impact of the new hires and product launches,� Chief Executive Officer Jeffrey Meyer said - BBG

o Canada� Banks May Sell More Covered Bonds on Rule Change: Canada Credit - BBG

� Canadian lenders including Royal Bank of Canada may find it easier to tap the $3.25 trillion covered bond market as proposed laws increase demand from European investors

� The federal government said in its March 4 budget that it would add legislation setting out rules for covered bonds, debt securities backed by assets such as mortgages. The legislation aims to �increase legal certainty� for investors, according to the budget documents.

o Shore Capital� up 5% -� Swings Into Profit on Asset Management - BBG Arrow

� �Last year was a terrific one for us, with all areas of our business firing on all cylinders,� Chairman Howard Shore said in an interview. �The balance sheet turned around in the second half and we got increases in valuations.�

� Healthcare:��

o RSCR Res-Care reports IN LINE WITH PREANNCD.. guidance was relatively in-line

o MGN +5.6% - data

o WX -6.7% (earnings)

o M&A:�� SAN.FP Sanofi-Aventis and Merck (MRK) to combine animal health units

o Ark Therapeutics: European regulators have recommended that Ark conduct further clinical trials on its brain cancer drug, Cerepro, before approval can be granted. The company has dropped its appeal against the decision, whilst announcing that it has received approaches that may or may not lead to an offer being made for the company. No suitors were named. 3 pence easier, 22% at 10.625 pence. 09.54 GMT

� Real Estate

o Real Estate: City of London Developers to Start Skyscrapers as Rents End Two-Year Drop - BBG

� Brookfield Asset Management Inc., owner of a stake in the� U.K.'s tallest building, is about to start constructing an even� higher tower in the City of London. The 64-story Pinnacle is� currently the only major office project scheduled for� completion after 2012 in the City, the capital's main financial� district. That may be about to change. Brookfield is seeking a� site to build another office tower, this time as developer

o LII LN -3% figs Liberty intl.

o Liberty International Plc, the largest U.K. mall owner, slid 2.6 percent to 493.3 pence after announcing plans to split into two listed companies to offer investors a choice between shopping centers and London properties

� MINING

o Antofagasta (-1.9%) FY net misses, reaffirms 2010 guidance.

o Hochschild (-3.6%) to increase stake in Gold Resource Corp to 29%.

� ENERGY

o Int'l Power ( +1.1%), FY figures top-end.

� CHEMICALS

o Akzo Nobel (+1%), Increase in China revenues.� BBG

� Weir rallied 6.3 percent -� reported

o Weir Group: Engineering company Weir Group reported a 6% rise in full-year pretax profit. Dividend has been raised 14% to 21 pence from 18.5 pence a share. (Up 6.5 %, 57 pence. 09.45 GMT)

� Deutsche Post AG reported a fourth-quarter loss and full-year earnings that missed estimates and analysts

� KLOECKNER:� Posts FY09 EBITDA loss of EUR 68m

� FASTWEB:�� Postpones AGM to study court case

� ASHTEAD:�� 9M underlying profit in line

� INMARSAT:� FY EBITDA up 12%, raises dividend

� ST IVES GROUP:�� 1h PTP up 35.48%, loses big contract

� �International Power (IPR.LN) report, trades up today

� Novolipetsk Steel says to boost 2010 steel output +17% to 12.4M tons � Bloomberg

� carbon steel� Rautaruukki Oyj climbed 5.1 percent to 14.96 euros. Finland�s biggest producer of carbon steel was raised to �buy� from �hold� at Deutsche Bank AG.

� UK Coal: Uk Coal, owner of what remains of Britain�s coalfields and a vast �brown-field� property portfolio, are still subject to speculation that one of their largest holders, John Whittaker of Peel Holdings has been approached for his stake. The stock closed 3 pence stronger yesterday (52.5p) and continued to rise this morning (currently up 10% @ 57.75. 09.40 GMT). Whittaker rejected the offer because he is currently working on his own plans to launch a cash offer for the group.� BBG,

� Scott Wilson Group: Design and Engineering consultancy said that underlying business performance was consistent with current market expectations. Continued growth abroad in China, India and Eastern Europe. 7.25 % better at 92 pence. 09.57 GMT.

� China Life, the nation�s biggest insurer, advanced 3.3 percent after saying 2009 profit probably more than tripled.

� Poly Real Estate, China�s second-largest developer by market value, gained 4.4 percent to 20.28 yuan after saying sales rose 41 percent in the first two months

� China Southern Airlines Co. rallied to a seven-month high as it announced a share sale

OVERSEAS ACTION***

� Europe dn 0.7%

� Nikkei (0.17%);

� �Hang Seng +0.05%;

� Shanghai Composite +0.52%

� Asian indices closed mixed as investors waited for Chinese economic data due later in the week

� Data:

o UK Trade deficit widens in Jan

o Fitch analysts cautious on Portugal despite recent austerity targets

o Strong set of economic data from Australia

o Japan Feb preliminary Machine Tool orders +217.3% vs prior +189.4%.

o �Australia Feb NAB Business Confidence 19 vs year ago 15.

o Norway Q1 Consumer Confidence: 18.5 v 17.0e

o New Zealand Feb Card Spending m/m: -0.4% v 0.4% (first negative figure since June 2009)

o (UK) UK Feb RICS House Price Balance: 17% v 30%e (6-month low)

o �(UK) UK Feb BRC Retail Sales Monitor SSS: 2.2% v -0.7% prior; Total Sales: 4.5% v 1.2% prior

o �Australia FEB NAB Business Conditions: 8 v 3 prior; Business Confidence: 19 v 15 Prior (3-month high)

o Australia FEB ANZ Job Advertisements m/m: 19.1% v -8.1% prior (multi-year high)

INVESTMENT BANKING WRAP

Cisco (CSCO) offers remedies in EU review of Tandberg acquistion; EU review of deal extended to 29-Mar � wires

Daimler (DAI.GR) confirms sale of Tata Motors (TTM) stake, proceeds will be booked in Q1. Royal Wessanen (WES.LN) launches after yesterday's close and prices secondary offer.

M&A

� GGP General Growth Properties has bolstered its case for exiting from bankruptcy as a stand-alone company by lining up nearly $4 billion in commitments from creditors Fairholme Capital Management and Pershing Square Capital Managemen

o The pledges -- added to $2.6 billion that Canadian property investor Brookfield Asset Management already has agreed to sink into General Growth -- would allow the mall owner to eliminate most of its $7 billion in unsecured debt

o General Growth's board has yet to vote on the proposal.

o �If BAM moves ahead with this structure, it removes most if not all uncertainty from their previous bid, and removes any doubt to whether it�s credible or not,� - BBG

o http://www.reuters.com/article/idUSN0819641920100309

o http://www.bloomberg.com/apps/news?pid=20601087&sid=aUPUeMe9OHKI&pos=5

� RDS, PTRl May Need to Increase Arrow Bids, Bernstein Says- BBG

o Royal Dutch Shell Plc and PetroChina may need to increase their bid for Arrow Energy Ltd. by as much as 18 percent to A$3.9 billion ($3.5 billion) based on similar transactions in Australia

o �This is relatively cheap compared to historic deals, suggesting there may be possible upside to come for Arrow shareholders,�

o http://www.bloomberg.com/apps/news?pid=20601087&sid=aOyrutLdExfY&pos=4

� XOM Exxon Lowers Bar, Buys Assets Previously Deemed Unattractive- BBG

o Exxon Mobil Corp., BP, and Total SA are investing in assets that previously weren�t worth their time or money after oil-rich nations reduced access to reserves and exploration drilling faltered

o major producers are investing in projects they once eschewed, including geologically complex oil and gas fields, called �unconventional� by the industry to distinguish them from the easy-to-get oil and gas of earlier years

o http://www.bloomberg.com/apps/news?pid=20601085&sid=a5a4C5TNqjpA

� Barclays was speculated yesterday to be set to receive a significant investment from a China-based party- the Times

� Total Says Refinery Sales �Possible� Amid Weak Demand, Margins - BBG

o Total SA, Europe�s biggest refiner, will press ahead with plant sales to reduce oil-processing capacity by about a fifth amid expectations that demand won�t pick up anytime soon

� Autos: Tata Motors Falls After Daimler Said to Sell Stake- BBG

o The German automaker offloaded its 25.6 million shares, equal to 5.3 percent of Tata, for 750 rupees each, the person said. That�s a 6 percent discount to yesterday�s close

o The market is giving a good price,� said Jagannadham Thunuguntla, chief strategist at SMC Capitals Ltd. in New Delhi. �Daimler and other European automobile makers are facing pressure.�

o http://www.bloomberg.com/apps/news?pid=20601091&sid=aUAhMcmug4R4

� CME agrees Bolsa Mexicana tie-up- FT

o CME Group, the largest US futures exchange, deepened ties with Central and Latin American derivatives markets on Monday by agreeing a partnership with Bolsa Mexicana de Valores, operator of Mexico�s MexDer futures exchange

o The move comes weeks after CME expanded an existing alliance with BM&FBovespa, the Brazilian exchange group, after the S�o Paolo-based company raised its stake in the Chicago operator to 5%. The CME already owns 5% of BM&FBovespa

� SKS Shanks Falls Most in Nine Years After Carlyle Talks End- BBG

o Shanks Group Plc fell the most in nine years in London trading after saying talks with a fund managed by Washington, D.C.-based leveraged-buyout firm Carlyle Group over a possible takeover offer ended

o �The board�s response to the approach has always been about price,� Chairman Adrian Auer said in today�s statement.

o �Although the timing of their approach was not of our choosing, we have engaged fully and professionally, but Carlyle has failed to offer a price which (in the view of the board) properly reflects the value of the group.�

� Unfriendly deals get even less friendly these days- Reuters

o In recent weeks, Novartis AG has launched an offer for Alcon (ACL.N) that includes a lesser value or squeeze-out for minority shareholders. Astellas Pharma launched a hostile bid for OSI Pharmaceuticals (OSIP.O) and sued to block OSI's poison pill. Meanwhile, Air Products and Chemicals (APD.N) launched a hostile bid for Airgas Inc (ARG.N) and the two companies traded lawsuits.

o "Hostile activity picks up when merger activity picks up, and generally there is litigation associated with it,"

o http://www.reuters.com/article/idUSN0824432820100308

� CSCO Cisco offers remedies in EU review of Tandberg acquisition�

� RBS identifies partner for China securities JV- Reuters

o RBS's long-awaited entry into the Chinese securities market will enable the lender to underwrite stock and bond offerings in China, which is seen as a source of strong growth by many global investment banks

o UBS UBS.VX, Credit Suisse (CSGN.VX), Goldman Sachs (GS.N), Morgan Stanley (MS.N), Deutsche Bank (DBKGn.DE) are among global banks with securities joint ventures in China. Citigroup (C.N) has an interbank government bond joint venture, but not a JV which allows it to underwrite equity.

o http://www.reuters.com/article/idUSTOE62801P20100309

� Deutsche Telekom Seeks All of Clickandbuy- FT

o Deutsche Telekom AG is in talks to buy the stake in Internet payment service Clickandbuy that it doesn�t already own

o The German company owns about 20 percent of Clickandbuy through a subsidiary

� Banco Popular Shares in Banco de Sabadell rose 3.4% yesterday amid talks that Banco Popular might make a takeover offer - BBG

� MMC Marsh & McLennan selling Kroll for $1.3 bln-FT

o Marsh & McLennan Cos Inc (MMC.N), the No 2. global insurance broker, has put up its security consulting business Kroll up for sale for $1.3 billion and received offers from several major private equity firms in the first round of bidding

o Three firms, The Carlyle Group [CYL.UL], Apax Partners and General Atlantic, submitted bids in late February by the deadline for first expressions of interest

o Those people also said BC Partners may also want to make an offer along with one or two trade bidders

� Worthington Industries called ripe for a takeover- Columbus Dispatch

o Steel Business Briefing said on Sunday that Nucor Corp.'s recent announcement of a venture to operate a steel processor might prompt other large steel producers to acquire processors as well.

o "Worthington has been on the radar screen of a number of international and domestic players," said Christopher Plummer, managing director of Metal Strategies. He was speaking in general, not about any specific takeover possibility.

o http://www.dispatch.com/live/content/business/stories/2010/03/08/worthington-steel-called-ripe-for-takeover.html?sid=101

� Ciments Francais, Italcementi dea impossible says Italcementi CEO- S&P

� Maersk Says Won�t Comment on DRYS DryShips Acquisition Speculation- BBG

o A.P. Moeller-Maersk A/S said it won�t comment on speculation that it may acquire DryShips the Greek owner of deep-water drilling rigs and dry-bulk vessels whose shares rose yesterday on such reports

� Spurned by banks, China property firms court PE funds- Reuters

o Capital-hungry Chinese developers are turning to real estate private equity funds this year as big domestic banks tighten lending to help Beijing curb property prices, a top concern for most Chinese

o Foreign banks and buyout funds have been in active discussions with private equity specialist lawyers to form property funds since the start of the year, and some multi-hundred-million dollar funds are ready to go, according to people involved in these fund-raising plans

o http://www.reuters.com/ article/idUSTOE62803W20100309

� Hochschild Mining raises its stake in Gold Resource Corp to 29% from 27% at a cost of $5.2M- BBG

� Russia Sberbank to seek Turkish bank stake- Reuters

o Sberbank, Russia's biggest lender, is lining up a bid for the 20.85 percent stake in Turkey's Garanti Bank being sold by General Electric Co (GE.N)

o "GE is delighted that Sberbank is going to be one of five or six bidders for its stake in Garanti," the source told Reuters, on condition of anonymity. He said bids were due by March 12

o http://www.reuters.com/article/idUSLDE6272D820100308

� U.K. Coal Says No Cash Offer Received, Investigating Proposal- BBG

o UK Coal Plc said it is unaware of a cash offer for the group but is �at a very early stage� of investigating an approach.

� SNY Sanofi, MRK Merck to create animal health leader- Reuters

o Sanofi will pay Merck $250 million as part of the deal, giving both companies a 50 percent share in their pets and livestock joint-venture that could take the top spot from Pfizer Animal Health (PFE.N), if it wins anti-trust clearance

o At a conference call Sanofi and Merck chief executives declined to indicate what possible anti-trust challenges their joint-venture might face and as a result, did not say what cost benefits the combination could yield, or give growth targets

o http://www.reuters.com/article/idUSGEE5AO0OJ20100309

� A2A� will nominate advisors for the division of assets in group Edison by April- Il Sole 24

� MRK Merck May Expand Presence in Middle East- National Reports

o Merck & Co., the second-largest U.S. drugmaker, may acquire or collaborate with five health-care companies in the Middle East to increase sales in the region by 30 percent

� Delta is unlikely to seek a higher bid- S&P

o Hopes that Delta might see a counteroffer to the cash bid received last week were dampened by news that shareholder Schroders had sold stock

o Schroders announced it had disposed of 1.4m shares in the manufacturer at GBP 1.90 apiece. Delta last week recommended a takeover offer, which was worth GBP 1.85 per share.

� Bidding War Pits Pfizer And Teva- NYTimes

o a three-way bidding war has broken out for Ratiopharm, a leading generic-drug maker with headquarters in Ulm

o The auction is riveting drug makers and analysts because it pits the world�s biggest maker of brand-name drugs, the American company Pfizer, against the global leader in generics, Teva Pharmaceutical Industries, with headquarters in Israel. The other bidder I Actavis

o http://www.nytimes.com/2010/03/09/business/09drug.html?ref=todayspaper

� UNILEVER NV: Management to up stake � S&P

� DBD, U.S. undoes key part of voting machine deal- Reuters

o The U.S. Justice Department required Election Systems & Software to partially undo a deal last year between it and a unit of Diebold Inc (DBD.N), the two largest U.S. makers of voting machines

o "The proposed settlement will restore competition, provide a greater range of choices and create incentives to provide secure, accurate and reliable voting equipment systems now and in the future,"

o http://www.reuters.com/article/idUSN0819404720100308

� OFIX Orthofix sells vascular business to COV Covidien- Reuters

o Orthofix International NV (OFIX.O) said it sold its vascular business, including its AV-Impulse mechanical compression technology, to Covidien (COV.N), and expects net cash proceeds of up to $19 million

� ARK TherapeuticsSAYS WILL UNDERTAKE REVIEW OF BUSINESS- BBG

� Lender putting www.sex.com domain on auction block- Reuters

o DOM Partners LLC, a New Jersey lender that backed a 2006 purchase of the domain name for a reported $14 million, is foreclosing on the Internet property, and is due to auction it on March 18 at New York law firm Windels Marx Lane & Mittendorf LLP, according to legal notices

o "We don't know who's serious and who's not, but prospective bidders need a $1 million certified check. It should be interesting."

o http://www.reuters.com/article/idUSN0819496920100309

� Shanghai Pharmaceutical Rises by 10 Percent Limit on Merger Plan- BBG

o Shanghai Pharmaceutical rose by the 10 percent daily limit in Shanghai trading after completing a merger of two local drugmakers through a share swap

� Telefonica eyes group to bid on Mexico fiber optic- Reuters

o Spain's Telefonica (TEF.MC) may team up with small telephone and cable operators in Mexico to bid on a fiber optic network meant to challenge tycoon Carlos Slim's empire

o Last month, executives of Mexican cable operator Megacable said they would likely form a group with Telefonica, broadcaster Televisa and smaller local operators to bid together in the auction, which is due to be completed by June

o http://www.reuters.com/article/idUSN0820097520100309

� SL Standard Life is thinking about selling its health insurance arm- Telegraph

� LII Liberty Intl unveils demerger, fall in NAV- Reuters

o Britain's biggest mall owner, Liberty International (LII.L), is carving up its 6.2 billion pounds ($9.3 billion) portfolio to drive shareholder value, a likely watershed for the rebounding UK listed property sector

o �The demerger will enable Capital Shopping Centres and Capital & Counties to achieve greater value for shareholders over time, than the current Liberty would as one combined business�

o http://www.reuters.com/article/idUSLDE62713X20100309

� F&C Asset Says It Will Offer 12.5 Euros a Share for C-Quadrat- BBG

� Hypermarcas in talks to buy Brazil drugmaker- Reuters

o Hypermarcas, the largest Brazilian multibrand consumer goods manufacturer, said late on Monday it is in talks to buy over-the-counter drugmaker Luper for 52.2 million reais ($29.2 million) in cash

o http://www.reuters.com/article/idUSN0820346720100309?feedType=RSS&feedName=rbssConsumerGoodsAndRetailNews

� SLE Sara Lee May Invest in Strauss Coffee Business- Calcalist

o Sara Lee Corp. is in talks with� Strauss Group Ltd. to purchase 20 percent to 30 percent of the Israeli company�s coffee business

o Strauss told Calcalist in� response to the report that it is in contact with various� companies from time to time and has nothing to report regarding Sara Lee at this time

� Galp Chairman Confirms Contacts on Shareholdings- Jornal

o Galp Energia SGPS SA Chairman Francisco Murteira Nabo said there have been �informal� conversations� about the Portuguese oil company�s shareholder� structure

� ARCADIS Looking for M&A targets � S&P

$ Raising

IPOs

� Consumer pos?:�� Merlin may be planning an IPO

o Merlin said last month it was considering all options for future ownership structure, including an initial public offering.

o Merlin Entertainments Group Ltd., the U.K. owner of Legoland and Madame Tussauds, said full-year profit increased 17 percent as it attracted visitors with new rides and attractions at its theme parks. � BBG

o Canada's TRX Terrane plans to spin-off Berg project- reuters

o Canadian exploration company Terrane Metals Corp (TRX.V) is focusing on becoming a junior gold producer and plans to spin-off its Berg copper-molybdenum project

o �We are going to try and position Terrane as a gold company, as gold companies get premiums in the market," said CEO Pease, while speaking along the sidelines of the PDAC mining convention in Toronto.

� Cebu Air Revives 12 Billion Peso IPO for Expansion- BBG

o The airline�s share sale will be held �as soon as regulatory approval� is obtained and �market conditions are ripe,� �If a window opens up we want to be ready to hold a sale.�

o The airline will use proceeds from the share sale to boost its fleet of 29 jets, Sebastian said. The company plans to sell 235.6 million shares at up to 95 pesos each

� IPO could value Kabel at $3.5bn- FT

o The owners of Kabel Deutschland, Europe�s largest cable network provider, plan to sell off part of the group in a deal that could value the company at about �2.5bn ($3.5bn) and become one of Germany�s biggest IPOs in three years

o The current stakeholders � primarily buy-out firm Providence Equity, with 88% � are seeking an equity valuation of �2.5bn, while the company�s net debt stood at almost �3bn as of Dec 31

� Zhongsheng Said to Start Taking Orders for Downsized H.K. IPO- BBG

o Zhongsheng Group Holdings Ltd., aChinese automobile dealer, will begin taking orders for a Hong Kong initial public offering tomorrow after delaying its start� last week

o The Dalian, northeastern China-based company may seek to raise as much as HK$3.67 billion ($473 million) selling 286.2 million shares, or a 15.5 percent stake, at HK$9.54 to HK$12.83 each, said one of the people

o http://www.bloomberg.com/apps/news?pid=20601089&sid=azZ5J8t1mseE

� China Publishing Group Plans Shanghai Listing in 2010- BBG

o China Publishing Group plans to raise as much as 1.8 billion yuan ($264 million) in an initial public offering in Shanghai by the end of this year

o The state-owned publisher will form a new company for the listing within the next two month. The group is also establishing a digital publishing Web site, as well as developing e-book readers

� C&W arm eyes Asian expansion after listing- FT

o C&W Worldwide is one of two listed companies resulting from the C&W group demerger that takes place on March 26. Based on the group�s old UK business, C&W Worldwide provides telecom services to corporate rather than residential consumers

o http://www.ft.com/cms/s/0/8088cfda-2af5-11df-886b-00144feabdc0.html

Pricings

Initial Offerings

� AVEO Pharmaceuticals Inc. (AVEO)--7 million shares expected to price Wednesday via J.P. Morgan and Morgan Stanley. Price talk: $13 to $15.

� Baltic Trading Ltd. (BALT)--16.3 million shares expected to price Tuesday via Morgan Stanley and Dahlman Rose. Price talk: $14 to $16.

� Sensata Technologies Holding BV (ST)--31.6 million shares expected to price Wednesday via Morgan Stanley, Barclays Capital, Goldman Sachs, Bank of America-Merrill Lynch, J.P. Morgan, Citigroup and Credit Suisse. Price talk $18 to $20.

� Film Department Holdings (TFDI)--6.5 million shares expected to price

one day this week via Girard Securities Corp. Price talk: $12 to $14.

Secondary or Follow-On Offerings:

� GT Solar International Inc. (SOLR)--25 million shares expected to price Tuesday via UBS, Credit Suisse and Thomas Weisel

News

� Extended Stay hotels could exit bankruptcy in June- Reuters

o The company, which runs over 650 hotels, said in court documents that it is seeking confirmation of its proposed bankruptcy reorganization in June, and could emerge from court protection as a privately held firm, backed by a new $450 million investment from private equity firms Centerbridge Partners L.P. and Paulson & Co

o The company said the new cash would help it fund operations, make regular debt payments and allow it to spend money on hotel improvements

o http://www.reuters.com/article/idUSN0816626420100308

� Lyondell restructuring plan includes Apollo role- Reuters

o LyondellBasell filed a restructuring plan on Monday, rejecting a takeover bid from India's Reliance Industries in favor of commitments from private equity firms, including Apollo Management LP, to help the chemicals maker exit bankruptcy

o �We will have a new management team in place, we will have considerably less debt, and we will be adequately capitalized with the equity from the rights offering as well as exit financing,"

o http://www.reuters.com/article/idUSSGE6270CQ20100308

� GAS NATURAL: Negociations over EUR 4bn loan refinancing � press � S&P

� Hoku gets second portion of $50 mln loan from Tianwei- Reuters

o Hoku Materials Inc, a unit of Hoku Scientific Inc (HOKU.O), said it received the final portion of the $50 million-loan from Tianwei New Energy Holdings Co Ltd, and plans to use the proceeds to continue construction at its Idaho polysilicon plant

o http://www.reuters.com/article/idUSSGE6270LF20100308

� Bankruptcy Exit: Tropicana casinos exit bankruptcy under Icahn deal- Reuters

o U.S. casino operator Tropicana Entertainment on Monday emerged from bankruptcy protection under a $200 million deal backed by billionaire investor Carl Icahn.

o Tropicana is the first major company in the gaming industry to successfully complete a Chapter 11 reorganization necessitated in part by the combined effects of collapsed commercial credit markets and associated declines in the U.S. consumer economy,"

� CMA Comerica, SUSQ Susquehanna to raise funds to repay TARP- Reuters

o Comerica, a large U.S. regional bank, said it will offer common shares to raise about $800 million as it intends to repay the U.S. Treasury's funds, sending its shares down 2 percent after the bell

o Separately, Susquehanna Bancshares said it will offer common shares to raise $300 million partly to support future acquisitions, including FDIC-assisted acquisition transactions or to pay back U.S. Treasury's funds

o http://www.reuters.com/article/idUSSGE6270L020100308

� India Cements Said to Have Raised $65 Million From Share Sale- BBG

� Ascension Health Comes to Market With $1.35 Billion Bond Sale- BBG

o Ascension Health, the largest nonprofit health-care system in the U.S., plans to sell about $1.35B in tax-exempt revenue bonds starting tomorrow as yields hover near record lows

o �On the long end, the rates are very favorable,� said the director of capital finance. �We think it�s a great opportunity to fix in our rates. Between the refunding and the new money, we�re getting to the place where we want to be with respect to our overall debt profile.�

o http://www.bloomberg.com/apps/news?pid=20601103&sid=aQ6VoyzLWm14

� China Southern Jumps Most in Two Months on Share Sale- BBG

o China Southern Airlines Co., the nation�s biggest carrier, rose the most in almost two months in Hong Kong trading after announcing plans to sell at least 10.75 billion yuan ($1.6 billion) of new shares to pare debts

o The airline�s parent will buy 1.5 billion yuan of new shares in the sale using money it received from the government as part of efforts to bail out unprofitable carriers

o http://www.bloomberg.com/apps/news?pid=20601089&sid=ai5ehBpCkXg0

� USG People announces the launch of a placement of up to 7,019,994 new ordinary shares- S&P

� Wessanen launches an equity offering of up to 6,835,910 newly issued ordinary shares- S&P

� Financials: Royal Wessanen says issued approx 6.835M new shares at �2.69/share

� Energy: PCX Patriot Coal files to register 13.1M shares for holder ArcLight Energy Partners

� Financials: SUSQ SUSQ Susquehanna files mixed shelf of indeterminate amount

� Financials: CMA Comerica commences offering of ~$800M in common stock through JPMorgan

�UPCOMING EVENTS

Top Events

� Tuesday March 9:

o Greece's prime minister visits President Obama in Washington

o National Association for Business Economics conference (3/7-9)

� White House economist Cristina Romer and the Chicago Fed's Charles Evans,speak

o Health Care Conference- Cowen (3/8-11)

o Institutional Investors Conference- Raymond James� (3/7-10)

o Global Technology Conference- Jefferies (3/8-10)

o China Investment Conference � Rodman & Renshaw (3/7-9)

o Consumer Analyst Group of Europe Conference (3/8-10)

o Global Media and Communications Conference 2010 (3/8-10)

o CFO Rising Conference & Expo (3/7-10)

o Technology Conference- Montgomery (3/9-10)

o Consumer/Retail Leveraged Finance Conference- Goldman

o Aviation & Transportation Conference- JPM (3/9-10)

o Global Ag Productivity Conference- Credit Suisse (3/9-10)

o Musculoskeletal Conference- Canaccord

o Management Access Conference- Wedbush (3/9-11)

o RBC Capital Markets Cap Intro

o Sovereign Hotspots: Diverging Trends

o ITB, the big travel fair, begins- Barron�s

o FL, CVX analyst meetings

o ADI� shareholder meeting

o TSM monthly sales

LOOKING AHEAD

� Economics