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Hitt og þetta 26. apríl 2006

DJ EUROPEAN MORNING BRIEFING: Rate Hike Concerns Persist

US SUMMARY: Economic Data Too Good, Markets Fall

DJIA 11283.25 loss 53.07 dn 0.5%
NASDAQ 2330.30 loss 3.08 dn 0.1%
S&P 500 1301.74 loss 6.37 dn 0.5%
Dow Future 11336.00 gain 3.00 0.0%
NASDAQ Future 1716.00 gain 1.50 up 0.1%
S&P Future 1309.50 0.00 0.0%
10-Yr US Treasury: 5.08% up 0.09
(Futures values as of 0450 GMT)
Interest rate worries sent stock and Treasury prices lower Tuesday on Wall Street after strong consumer confidence and home sales data signaled that the economy is holding up better than expected and suggested that the Federal Reserve has room for more rate increases.

STOCKS: Crude oil prices fell following an announcement by President Bush that he would waive regional clean-air specifications for summer-grade gasoline to attract more imports of fuel to the U.S. Bush also said he would halt deposits of oil to the nation's strategic petroleum reserve until fall. But analysts said the measures would have little practical impact on crude and gasoline prices. Light sweet crude for June delivery settled 45 cents lower at $72.88 a barrel on the New York Mercantile Exchange, dropping on the heels of a 4.48-cents-per-gallon decline in May gasoline futures, which finished at $2.1291 a gallon.

The Conference Board said consumers shrugged off higher gasoline prices in April and sent its widely watched barometer of consumer confidence to its highest level in almost four years. The National Association of Realtors said sales of previously owned homes edged up slightly in March.

The strength in both numbers suggested the Fed may be in a position to raise rates beyond the quarter percentage point increase widely expected at its next meeting in May.

"We're in a funny space," said Stuart Freeman, chief equity strategist for A.G. Edwards & Sons in St. Louis. "Too much good news is not good news because the market worries about the Fed."

In earnings news, Dow component DuPont Co. said rising energy and materials costs led to a 16 percent slide in quarterly profit, but the chemical maker boosted its 2006 outlook.

AT&T's quarterly profit swelled 63 percent in its first report following SBC Communications' acquisition of AT&T. Revenue jumped 55 percent to reach $15.8 billion.

BONDS: The good economic news Tuesday proved toxic for U.S. Treasurys, as did a lackluster auction for the government's five-year inflation index note.

The market's economic woes and related monetary policy jitters likely signals the selling may continue. "It's worth repeating the new Fed mantra: 'Everything is data dependent,'" said John Canavan, strategist with Stone & McCarthy Research Associates. Based on the economic data and events set for later in the week, "in the near term I think rates should continue to rise."

The market has two more debt auctions to absorb, and frequently the act of absorbing that debt can put the market under the gun. Sales of $22 billion in two-year notes and $14 billion in five-year notes are set for Wednesday and Thursday, respectively.

ASIAN SUMMARY: Tokyo Shares Higher; Commodities Mixed

USD-Yen 115.08 gain 0.22 up 0.2%
AUD-USD 0.7465 gain 0.0005 up 0.05%
Nikkei 225 17002.98 gain 32.69 up 0.2%
Hang Seng 16641.32 gain 63.55 up 0.4%
Taiwan Index 7083.76 gain 23.82 up 0.3%
S.Korea Kospi 1442.18 gain 11.03 up 0.8%
JGB Yield 1.9350% up 0.0300
(All values as of 0450 GMT)
STOCKS: Japanese stocks are slightly higher Wednesday, with technology and exporter blue chips mixed as Japan plows into quarterly earnings season. Nissan Motor Co. reported a 9.4 increase in profit for the January-March quarter. Honda announces results later Wednesday. Australian shares were up 1%, boosted by a strong performance by the resource sector on the prevailing strength in metals prices.

BONDS: Prices of Japanese government bonds are lower across the curve, as investors take cues from Treasurys and remain cautious ahead of Friday's CPI data and Bank of Japan meeting.

METALS: Base metals are mixed, and any efforts by China to slow its economy could trim demand and cause prices to fall, analysts say. Spot gold is down 45 cents at $631/oz, as the dollar firms slightly. But political and energy tensions help stunt the fall. UBS retains its $610 one-month forecast. Spot price is likely to continue in a wide $625-$640 range for now, says ScotiaMocatta.

OIL: Crude prices are off 2 cents at $72.86 a barrel in Asian trading as market participants await the release of a weekly U.S. petroleum supply snapshot.

EUROPEAN OUTLOOK: Markets Mixed On Rate Hike Threat

Euro-USD 1.2417 loss 0.0013 dn 0.1%
Stlg-USD 1.7864 loss 0.0009 dn 0.05%
USD-Franc 1.2692 gain 0.0010 up 0.07%
(All values as of 0450 GMT)
European shares are set for a positive opening, with prices of government debt slightly lower. The euro opens little changed.

STOCKS: European markets are likely to nudge higher to start despite nagging concerns of further U.S. and European interest rate hikes. Good results overnight from STMicroelectronics, one of Europe's top two manufacturers of semiconductors, should lend support to the technology sector.

U.K. spreadbettor CMC Markets forecasts a 7 point rise on the FTSE to 6096 and sees the DAX up 13 at 6092 and the CAC up 9 at 5244.

European markets retreated off earlier highs to close mixed Tuesday after a rise in consumer confidence in the U.S. stoked interest-rate fears and offset upbeat sales from carmaker Renault and food group Nestle.

BONDS: Prices of European government debt are likely to open slightly lower, in consolidating the selloff from Tuesday.

The 4% yield level should prove to be a good technical barrier for the 10-year bund, now around 3.97%. "So I think in the short term there should be the potential that they (bunds) stabilize at these levels," said Daniel Pfaendler, head of interest rates strategy at Dresdner Kleinwort Wasserstein in Frankfurt, Germany. The last time the bund yield hit 4% was Oct. 8, 2004.

Risks to price stability in the euro zone remain, European Central Bank vice-president Lucas Papademos said Tuesday. His comments served to underscore market worry about inflation and interest rates.

Wednesday brings the release of U.K. first-quarter gross domestic product data at 0830 GMT, followed by euro-zone February industrial production numbers at 0900 GMT.

U.K. GDP is expected to have grown 0.7% on the quarter and 2.2% on the year, according to a Dow Jones Newswires survey of economists. That compares with 0.6% quarterly growth and 1.8% on the year in the forth quarter of 2005.

Bunds and gilt futures fell to their lowest level in more than a year Tuesday after a surprise rise in German business confidence cemented expectations the European Central Bank will deliver its next small interest rate hike in June, analysts said.

FOREX: The latest data still favors the euro against the dollar. This helps focus market attention back onto the likelihood of ECB interest rate hikes at a time when the Federal Reserve looks likely to stop its hikes.

On Wednesday, markets will be watching for durable goods orders and new home sales data out of the U.S., as well as the Federal Reserve's Beige Book. If the dollar fails to gain on any good figures, traders are likely to sell more U.S. currency.

But others think that there could be upside to the dollar, particularly if the data does surprise on the upside, given the strong dollar-negative technical positioning in the market.

T. J. Marta, senior currency analyst at RBC Capital Markets in New York noted that there could be short-term risk because of these positions that may get squeezed if the dollar reclaims some of its losses."The risk is that the positions in the euro look overdone," he noted. "So there's a risk that you could get a short-term selloff in euro."

CALENDAR: Wednesday, Apr 26: US Durables, Fed Beige Book

GMT Expected Previous
0610 GER May GfK Consumer Confidence 5.0 5.1
0830 UK 1Q GDP, prelim +0.7%QQ +0.6%QQ
+2.2%YY +1.8%YY
0830 UK Mar Production figures
0900 EU Mar Euro Zone Indus Production +0.2%MM 0.0%MM
+3.0%YY +2.5%YY
0915 GER 5-year note auction results
1100 US Apr 21 MBA Refinancing Index -0.4%
1230 US Mar Durable Goods +2.7%
1300 US Tsy Secy Snow speaks to the Mortgage
Bankers National Policy Conference in
Washington
1400 US Mar New Home Sales +3.2% -10.5%
1430 US Apr 21 US Energy Dept Gasoline Stocks (in -2.4M -5.4M
barrels)
1430 US Apr 21 US Energy Dept Crude Oil Stocks (in -140,000 -800,000
barrels)
1430 US Apr 21 US Energy Dept Distillate Stocks (in -1.2M -2.8M
barrels)
1800 US Federal Reserve Beige Book
N/A EU Feb Euro Zone Indus New Orders +0.8%MM -5.9%MM
+10.9%YY +9.7%YY

ABN Amro (ABN): 1Q Earnings
Average net profit (DJ, 5 analysts): EUR1.11B (EUR895M)
Note: Analysts note that recently acquired Banca Antonveneta will contribute to results for first time. Business lines in Asia and Latin America likely to boost results. According to Bear Stearns' analyst, question is now "how quickly and effectively ABN Amro can reap the benefits of the changes at WCS (wholesale), execute the integration of BAPV (Banca Antonveneta) and get the Italian subsidiary back on a growth path." Has peer perform rating.


Accor (12040.FR): 1Q Revenue
Average revenue (DJ, 4 analysts): EUR1.77B (EUR1.6B)
Note: US economy hotels seen as main growth drivers while upscale hotels likely to underperform. Accor has said 06 got off to good start in most markets apart from France. Analysts looking for 06 organic growth guidance.


Air Liquide (12007.FR): 1Q Sales
Average sales (DJ, 4 analysts): EUR2.73B (EUR2.77B)
Forecast range: EUR2.68B - EUR2.77B
Note: Revenue growth seen to be fueled by fast-growing hydrogen sales, though still a small part of total revenue, ING analyst Martin Dunwoodie says. Credit Suisse's Neil Tyler assumes like-for-like growth of 7.4% in the core gases and services, with a further 1.5% positive impact from the rise in natural gas price, as well as a 2.5% positive impact from currencies.


Amvescap (AVZ): 1Q Earnings
Note: Analysts focusing on update on cost-cutting and any restructuring plans when Amvescap reports 1Q results at 1200 GMT. Two analysts say they expect a net increase in group inflows, helped by inflows at Invesco unit. But analysts say they remain concerned about continuing outflows from Amvescap's AIM unit. "Markets are performing well at the moment, but if there was a slowdown, the imbalance between Invesco and AIM could be more of an issue," one analyst says. Preliminary funds under management at March 31 was $411B, Amvescap said.


ASMI (ASMI): 1Q Earnings
Average net profit (DJ, 4 analysts): EUR4.1M (EUR7.2M net loss)
Average sales: EUR203M (EUR134.7M)
Note: Earnings improvement due to favorable business climate within the semiconductor industry. Sales inprove due to strong order intake in 4Q. Analysts focus on 1Q order intake, 2Q outlook and restructuring efforts at the company's front-end operations. In that respect, comments about the merits of its business model are also eyed as investors anticipate a possible spin-off of the profitable back-end activities of ASMI from the loss making front-end operations.


BBVA (BBV): 1Q Earnings
Average net profit (DJ, 10 analysts): EUR995.2M (EUR815M)
Note: Earnings are driven by robust revenue growth from Spain and Latin America. Net interest income seen +23%, to EUR1.92B from EUR1.56B. Analyst to focus on Mexico and US division, with loan growth seen above 25% y-o-y, and on increase in provisions in Spain. BBVA to report pre-market.


Barco (BAR.BT): 1Q Earnings
Average EBITA (DJ, 4 analysts): EUR8.5M (EUR6.4M)
Average sales: EUR172M (EUR153M)
Note: Analysts say they will be looking closely at 2Q forecasts for an idea of the company's recovery potential. Investors may have been too hasty in anticipating a recovery," said KBC's Nico Melsens.

.Imperial Tobacco (IMT.LN): 1H Earnings
Average pretax profit before items (DJ, 3 analysts): GBP534M (GBP499M)
Note: Pre-exceptional EPS is seen at 55.5p, +11%. Management comments will be scrutinized for any clues on the company's acquisition intentions amid heightened speculation that Imperial is planning a bid for rival Altadis


Infineon (IFX): 2Q Earnings
Average net loss (DJ, 7 analysts): EUR75M (EUR114M net loss)
Average sales: EUR1.61B (EUR1.81B)
Note: Communications business again seen in the red, while onetime gain between EUR30M-EUR40M on Inotera IPO helps stem some of the losses. EBIT loss called at EUR56M from EUR117M. 2Q report due Wednesday at 0530 GMT.


Linde (LIN.XE): 1Q Earnings
Average net profit (DJ, 9 analysts): EUR113M (EUR85M)
Average sales: EUR2.33B (EUR2.12B)
Note: Order intake seen +20% to EUR2.82B vs EUR2.35B. Analysts say improved results driven by further restructuring, strong demand in Linde's gases business, particularly in the on-site, healthcare operations. Analysts to focus on progress of BOC (BOX) takeover, details on financing the deal, 1Q performance at material handling unit, which will likely be sold to fund BOC bid. Analysts also eye more detailed FY 06 outlook.

Legal & General (LGEN.LN): 1Q Sales
Average new business sales on APE basis (Co, 17 analysts): GBP337M (GBP307M)
Note: UK new business APE seen +9.2% to GBP309M from GBP283M. Keefe, Bruyette & Woods says 1Q 06 will see it continuing its trend of taking market share, especially in bulk annuities after slow numbers from Prudential.


Novozymes (NZYM-B.KO): 1Q Earnings
Average net profit (DJ, 6 analysts): DKK205M (DKK192M)
Note: Earnings are due to a 9.3% gain in sales, offset partly by higher R&D spending, forecasts shows. Strong growth in the enzyme used to produce bioethanol will help push the top line to DKK1.61B from DKK1.48B. Overall, organic growth is seen at 8%-11%, but bioethanol enzyme sales are seen zooming ahead by as much as 20%, as high oil prices prompt bioethanol production. EBIT seen +9.8% to DKK302M from DKK275M. The focus will also be on whether the company has staunched the decline in food enzyme sales.


OMX (OMX.SK): 1Q Earnings
Average pretax profit (SME Direkt, 6 analysts): SEK314M (SEK190M)
Note: Comments on structural changes in the European exchange environment aren't expected. Analysts are watching costs and 2Q guidance for Technology. Report due 0600 GMT.


Randstad Holding NV (37912.AE): 1Q Earnings
Average net profit (DJ, 4 analysts): EUR50.6M (EUR27.2M)
Note: Strong growth mainly due to encouraging developements in Dutch and German markets. Analysts are also looking to see how recent acquisitions have contributed to 1Q profit, as well as outlook for the second-quarter. The first quarter is traditionally a weak quarter for Randstad.


Reuters Group (RTRSY): 1Q Revenue
Average sales (Co, 5 analysts): GBP614M (GBP561M)
Note: expectations shows. Reuters no longer breaks down "core" revenues from its main trading screens business, but analysts are looking for around 2.5% growth in the existing Reuters business, with about 0.5% from "Core Plus" initiatives, new products and services launched in '05 as part of Reuters' growth plan. Analysts are looking for further guidance on the success of these initiatives.


Roche (RHHBY): 1Q Sales
Average sales (DJ, 8 analysts): CHF9.55B (CHF8.09B)
Note: Sales rise driven by continued strong demand for the key cancer drugs. Sales at the flagship pharmaceutical unit are expected to rise 22% to CHF7.51B from CHF6.16B, with sales of Avastin and Herceptin more than doubling. Revenue at the smaller diagnostic unit is seen at CHF2.08B, up 8%. A 6% sales decline of Tamiflu is expected to be the only weak spot, and analysts say they are unsure whether the company will lift full-year guidance or not, on back of the expected strong results. Eyes will be on guidance, pipeline update.


Scania (SCV-A.SK): 1Q Earnings
Average pretax profit (SME, 15 analysts): SEK1.855B (SEK1.698B)
Average sales: SEK15.59B (SEK3.873B)
Note: JP Morgan expects sales to have been driven by rising truck volumes. Sees EBIT margin falling to 11.9% from 12.1% a year earlier, hit by high R&D and rising raw materials costs. The bank will listen out for comments on how advance orders, aimed at avoiding the new emission standards which commence in Europe in October, will affect revenue distribution between 1H and 2H 2006.


SEB (SEB-A.SK): 1Q Earnings
Average operating profit (SME Direkt, 19 analysts): SEK3.396B (SEK2.689B)
Note: Corporate lending is also seen helping numbers, while higher interest rates and margin pressure is expected to hold back net interest income; at SEK3.759B from SEK3.536B. Focus is on costs and the bank's measures to reduce them. Report due at around 0600 GMT.


Stora Enso (SEO): 1Q Earnings
Average net profit (SME, 18 analysts): EUR166M (EUR58.6M)
Average sales: EUR3.57B (EUR3.15B)
Note: The forecast includes EUR20M capital loss from the sale of Grycksbo and capital gains of EUR130M from share sales. Eyes on comments on paper prices, energy costs and ongoing restructuring program.


Straumann (STMN.EB): 1Q Sales
Average sales (DJ, 5 analysts): CHF151.4M (CHF125.6M)
Note: Sales were helped by strong organic growth in its main market Europe. Recent product launches, such as its new dental implant product SLActive, are also seen driving sales growth. Favorable foreign currency translation is likely to add around 3% to overall sales, analysts say. Eyes on reiteration of full year earnings guidance and any comments about the recent launch of SLActive in the US.


TPSA (TPS.WA): 1Q Earnings
Average net profit (DJ, 5 analysts): PLN590M (PLN412M)
Average sales: PLN4.46B (PLN4.44B)
Note: Analysts don't expect any new provisions. But straight comparisons to 2004 are misleading, BZ WBK analysts say, due to a number of accounting changes by TPSA. As usual, mobile telephony to be closely watched, same for data transmission.


Vallourec (12035.FR): 1Q Revenue
Average sales (DJ, 6 analysts): EUR1.31B (EUR900M)
Note: One analyst says he expects the company's recent efforts to refocus on its most productive activities, especially those linked to oil production, to drive revenue growth. Another analyst adds the high revenue come from high demand in energy in general and the oil sector in particular.

OTHER SCHEDULED EVENTS:

Associated British Ports (ABP.LN): AGM

Acta Holding (ACTA.OS): 1Q Earnings

AddNode (ANOD-B.SK): AGM

Aggreko (AGK.LN): AGM

Aker Kvaerner (AKVER.OS): 1Q Presentation

Alexandra (AXD.LN): FY Earnings

Allied Irish Banks (AIB): AGM

Altamir (5383.FR): AGM

Arnoldo Mondadori Editore (MN.MI): AGM

Banca Nazionale del Lavoro (BNL.MI): AGM/EGM

Banco Pastor (PAS.MC): AGM

Banque Cantonale du Jura (BCJ.EB): AGM/FY Earnings

Befesa Medio Ambiente (BMA.MC): AGM

Berna Biotech (BBIN.EB): AGM

BHP Billiton (BLT.LN): Trading Update

Business Objects (BOBJ): 1Q Earnings

Carr's Milling Industries (CRM.LN): 1H Earnings

Concordia Maritime (CCOR-B.SK): AGM

Connecta (CNTA.SK): AGM

Corio (28896.AE): AGM

Croda International (CRDA.LN): AGM

Custos (CUST-A.SK): AGM

Davide Campari (CPR.MI): AGM

Engineering (ENG.MI): AGM

Erinaceous Group (ERG.LN): AGM

Esprinet (PRT.MI): AGM

Expanda (EXPA-B.SK): AGM

Filtrona (FLTR.LN): AGM

Gruppo Editoriale L'Espresso (ES.MI): AGM
Hanson (HNS.LN): AGM

Heijmans (34193.FR): AGM

Hera (HER.MI): AGM

HF Company (3853.FR): Analyst Meeting

Hi Media (7598.FR): 1Q Sales

Huber & Suhner (HUBN.EB): AGM

IBS (IBS-B.SK): 1Q Earnings

Inficon Holding (IFCN.EB): 1Q Earnings

Isagro (ISG.MI): AGM

Klippan (KLIP.SK): AGM

Koninklijke Brill (44252.AE): Press/Analyst Conference

Medivir (MVIR-B.SK): AGM

Metall Zug (METP.EB): Press Conference

Milano Assicurazioni (MI.MI): AGM

Millicom International Cellular (MICC): 1Q Earnings

Modern Times Group (MTG-B.SK): 1Q Earnings

Munters (MTRS.SK): 1Q Earnings

Nicox (7413.FR): 1Q Sales

Niloerngruppen (NILG-B.SK): 1Q Earnings/AGM

Noble Investments (NBL.LN): 1H Earnings

Nordic Semiconductor (NOD.OS): 1Q Presentation

Nordnet (NN-B.SK): AGM

NOTE (NOTE.SK): AGM

Orpea (18479.FR): Analyst Meeting

PagesJaunes (1009635.FR): 1Q Sales

Pan Fish (PAN.OS): EGM

PartnerTech (PART.SK): AGM

Pergo (PERG.SK): AGM

Pharming Group (37701.AE): AGM

Precious Woods Holding (PRWN.EB): FY Earnings Conference

Rank Group (RNK.LN): AGM/Trading Update

Rautaruukki (RTRKS.HE): 1Q Earnings

Rederi Transatlantic (RABT-B.SK): 1Q Earnings/AGM

Rottneros (RROS.SK): AGM

SalusAnsvar (SALA-B.SK): AGM

Scana Industrier (SCI.OS): 1Q Earnings Presentation

Scana Industrier (SCI.OS): AGM

Schering (SHR): Publication of Interim Report

Schroders (SDR.LN): AGM

Senea (SENE-A.SK): AGM

Simac Techniek (44161.AE): AGM

Simrad Optronics (SIT.OS): AGM

Stefanel (STEF.MI): AGM

Swiss Prime Site (SPSN.EB): AGM

TDC (TDC.KO): AGM

Tecan (TECN.EB): AGM

Terna (TECN.EB): AGM

Tribal Group (TRB.LN): Trading Update

Valora (VALN.EB): AGM

Wihlborgs Fastigheter (WIHL.SK): AGM

Wilson Bowden (WLB.LN): AGM

Wolfson Microelectronics (WLF.LN): AGM

Wolters Kluwer (39588.AE): AGM

Apem (5348.FR): FY 2005 Dividend Payment Date

IS Solutions (ISL.LN): FY 2005 Ex-Dividend Date

Svenska Handelsbanken - A Shares (SHB-B.SK): FY 2005 Ex-Dividend Date

Svenska Handelsbanken - B Shares (SHB-B.SK): FY 2005 Ex-Dividend Date


(END) Dow Jones Newswires