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C A Cheuvreux adds Nasdaq OMX to European SOR offering

January 6th, 2009 - Crédit Agricole Cheuvreux adds Nasdaq OMX to its European Smart Order Routing offering

TALF footnote - Fed can make changes to facility

The Federal Reserve reserves the right to review and make adjustments to these terms and conditions â�� including size of program, pricing, loan maturity, and asset and borrower eligibility requirements â�� consistent with the policy objectives of the TALF

FX Update- USD/CAD

USD/CAD fell from 1.2240 to 1.2120 after the automaker bailout news, which is seen as a near term positive for the Canadian auto manufacturing sector as well as the U.S. industry. It is still far from a certain resolution however, given the bridge loans may be renegotiated by the incoming Obama administration. Dealers said hardly more than "vapor" traded in terms of USD/CAD volume on the way down, and indeed the pairing has quickly moved back over 1.2200 in neck breaking price action.

US Regulators Approve New Credit Card Rules

The Office of Thrift Supervision today released new rules for credit card companies that impose additional restrictions in an effort to ban unfair and deceptive practices. The rules, which were expected earlier this week, ban companies from raising rates on existing balances and changing terms based on other debt obligations. They are effective July 1, 2010.

Canadian Retail Sales Fall 0.9% on Plunging Prices

Canadian Retail Sales Ex-Autos plunged 1.1% from a revised 0.5% rise in September (previously reported 0.8% increase), marginally below the consensus estimate for a 1.0% drop for October. Total Retail Sales fell 0.9% from a revised 0.9% increase prior (previously reported 1.1% rise) beating the consensus estimate of a 1.1% drop. The drop in retail sales was largely owing to price reductions. Overall, six out of eight retail sales sectors posted declines. Automotive Sales dipped 1.5% reflecting the 4.0% drop in sales by gasoline stations, marking the steepest decline since August 2007. Sales by furniture, home furnishings and electronics stores plunged 2.1% in October for a third consecutive decline. The decline was led by a 4.5% drop at furniture stores, largely owing to price reductions. Meanwhile, computer and software stores, a volatile sector, posted a recovery of a 3.6% increase in October. In constant dollars retail sales in terms of volume were up 0.1%. Y-o-Y retails sales increased 4.1% and up 6.0% excluding auto.

UK NOV RETAIL SALES UP 0.3% M/M, UP 1.5% Y/Y; SLOWEST ANNUAL RATE SINCE FEB 2006

UK retail sales continued to rise in monthly and annual terms in November, defying survey and anecdotal evidence which has become increasingly poor in recent months. The Office for National Statistics' official retail data showed sales up 0.3% in November from October, and 1.5% higher in annual terms. The annual rate is the slowest since February 2006. However, the figures are stronger than other survey evidence and defy market forecasts for a fall in the month-on-month rate of 0.8%, and an annual growth rate of 1%. The ONS noted that its data include more comprehensive coverage of discount and internet retailers than do other surveys. Much of the buoyancy in the November figures is due to these retail sectors, it said. Looking more closely at the data, non-specialised stores -- chiefly department stores-- showed a fall of 5.7% from last year, the worst outturn since February 1991. The three-monthly data show sales volumes falling 3.8%, the weakest reading since records began in 1986. October's overall retail sales figures were revised lower to show a month-on-month fall of 0.3%, from a drop of 0.1% previously reported. The annual growth rate was revised lower to 1.7% from 1.9%.

Correct: City AM's Thursday UK Morning Newspaper Roundup

Merger talks between British Airways and Qantas have collapsed with neither side able to agree over key terms, says the Times. The airlines have announced that after detailed discussions, they could not come to agreement over the merger terms. UK firms that have lost hundreds of millions of pounds in the Madoff scandal face scrutiny from regulators and the threat of legal action over failings in their due diligence on behalf of clients. Man Group is thought to have begun its own investigation, says the Telegraph. Mining group Rio Tinto has withdrawn as an investor to a $10bn (Â£6.5bn) Saudi aluminium project as it attempts to reduce its debt mountain amid the global economic slowdown, says the Telegraph. Lloyds TSB chairman Sir Victor Blank has rejected suggestions that the lender, which is merging with HBOS, will need to raise more capital as bad debts spike in the deepening recession, says the Telegraph. Marks and Spencer will launch another massive pre-Christmas price promotion today, as it battles what is understood to be calamitous recent trading, and fears in the City grow about its full-year profits, writes the Independent. Shares in Taylor Wimpey rose more than 7 per cent yesterday as dealers speculated that the embattled house builder might resolve its financing issues within the coming weeks, writes the Times. A multibillion-pound package of measures aimed at getting the banks to restart lending to business is to be announced, says the Times London-based buyout shop Permira, which has offered investors a chance to redeem some of their cash pledges to its last fund, said 13 per cent of the â�¬11.1bn fund had been called back by cash-hungry contributors. The fund is now worth â�¬9.6bn after 10 per cent of its investors took up the offer, says the Independent. Lord Mandelson confirms that the Government has held talks with Tata, the owners of Jaguar Land Rover, about state help, says the Times. A provisional rescue package being drawn up for Britain's beleaguered car manufacturers will have "very tough" conditions attached, in part to avoid setting too generous a precedent for other bail-outs, according to government insiders, adds the FT. Partners at Goldman Sachs are set to see their bonuses fall by up to 80 per cent this year and the cash component of their year-end packages capped at $400,000, reports the FT. Deutsche Bank has refused to redeem a bond issue in an unprecedented move that has rattled Europe's credit markets and cut short the relief rally following America's dramatic move to zero rates, reports the Telegraph. The cartel of the world's biggest oil-producing countries slashed production by more than expected 2.2m yesterday in an attempt to shore up prices hammered by the global recession, says the Independent. Sterling slumped to yet another fresh low against the euro yesterday, against a background of further bleak news on the economy and more evidence of the determination of the Bank of England to follow the US Federal Reserve and cut interest rates to close to zero early next year, says the Independent. The cost of inter-bank borrowing fell yesterday after the Federal Reserve slashed interest rates to as low as zero and vowed to use "all available tools" to fight a year-old recession, writes the Independent. Mike Ashley, the sportswear entrepreneur, expects to maintain his ownership of Newcastle United beyond the end of the football season because he cannot find a buyer willing to pay his Â£250m asking price, says the FT. Arsenal's future has again been thrown into chaos after the board ousted the longstanding director Lady Nina Bracewell-Smith, reports the FT.

UK CBI: Govt Econ Support Will Fail Unless Credit Flows Again

The UK employers' body, the CBI, warned that the government's economic support measures will be "ineffective and expensive failures" unless it moves to restore the flow of credit. It said the government should adopt measures to boost credit, including moves taken by the US government to give short-term loans to companies. The recapitalisation terms forced upon banks are also too punative and should be rethought, it said. Otherwise, some healthy companies "will struggle to survive", the CBI said.

FED Releases Terms of AIG RMBS Facility

Last month, the FED was authorized to lend up to $22.5bln to a newly formed Delaware LLC to fund the purchase of RMBS from AIG's securities lending portfolio. On Friday, the LLC borrowed approximately $19.8bln from the NY FED and used the proceeds to purchase RMBS assets from AIG subsidiaries with an estimated fair market value of $20.8bln as of October 31. Proceeds to the AIG subsidiaries, together with an additional $1bln in funding in the form of a cash contribution from AIG, will be used to return all cash collateral posted by the NY FED as counterparty under AIGâ��s domestic securities lending program. From the FED: * After all cash collateral is returned, AIG will have repaid in full all of its obligations to the New York Fed under the securities borrowing facility established on October 8 and AIGâ��s entire domestic securities lending program will be subsequently terminated. The New York Fed has all material control rights under the transaction documents, and will act as the controlling party and managing member of the LLC for so long as the NY FED is owed any amounts by the LLC. Terms of the Loan The senior New York Fed loan is secured by the portfolio of RMBS held by the LLC, which has a par value of approximately $40bln. The loan will be for a term of 6 years, and may be extended at the NY FEDâ��s discretion. The interest rate on the loan from the New York Fed is one-month LIBOR plus 100 basis points (currently, a rate of approximately 2.6 percent). After the senior loan to the New York Fed has been repaid in full plus interest, to the extent that there are sufficient remaining cash proceeds, AIGâ��s domestic insurance company subsidiaries will be entitled to receive from the LLC additional deferred consideration in the amount of up to $1.0 billion, plus interest at a rate of one-month LIBOR plus 300 basis points (currently, a rate of approximately 4.6 percent). Repayment of the loan will begin immediately upon the receipt of proceeds from the RMBS portfolio. Payments from the maturity or liquidation of the assets in the LLC will occur on a monthly basis, and will be made in the following order (each category must be fully paid before proceeding to the next lower category): * to pay the necessary costs and expenses of the LLC, including those incurred in managing and holding and/or liquidating assets, plus the funding of a cash reserve for future expenses; * to repay the entire $19.8 billion principal due to the New York Fed; * to pay all interest due to the New York Fed on its senior secured loan; * to pay up to $1 billion of deferred consideration to AIGâ��s domestic insurance company subsidiaries; * to pay interest due in respect of such deferred consideration. After payment of all of the foregoing, 1/6th of any remaining cash flows from the RMBS assets will be paid as deferred consideration to participating domestic AIG insurance company subsidiaries, and 5/6th will be paid to the New York Fed as contingent interest on the senior loan.

PREVIEW: UK CBI Dec Retail Survey Seen Improving to -41

The UK CBI's December retail sales survey on Wednesday is expected to improve slightly to -41 from -46. That reading would still mean a sizeable majority of retailers are seeing sales volumes fall in annual terms. December marked the start of the UK government's 13-month reduction in value-added tax (VAT) to 15% from 17.5%, but it is unclear what impact this has had on consumer spending. A number of high-profile retailers including Marks & Spencer, Tesco and the collapsed Woolworths chain have also put on heavy discounts to attract shoppers in the run-up to Christmas. Need to Know News' Scream Audio will broadcast the figures live at 1100 GMT.