AMERICAN MARKETS OUTLOOK: All markets are closed for Presidents Day holiday.

EUROPEAN MARKETS: European markets are mixed around midday, with takeover speculation lifting U.K. shares and German stocks suffering from negative signals from Asia.

In London, BOC Group rose 1.7% after a newspaper report that German rival Linde plans an GBP8 billion takeover bid that would create the world's largest industrial gasses company. Retail group Kingfisher, which owns struggling home-improvement chain B&Q, climbed 3.3% on reports that the company could be a target for Lowe's, which is planning an expansion into Europe. The FTSE 100 is up 0.1% at 5853, but below Friday's peak of 5863, its highest level since June 2001. The DAX is down 0.1% at 5787 as there are no impulses to offset weak signals from Asian markets. However, analysts note that the fundamental market remains positive, given good economic development and strong companies' results. MM Warburg raised its 2006 target for the DAX to 6300 from 5800.

Bunds and gilts are stronger after an early rally, which was triggered by technical factors rather than fundamentals. The focus is now turning to European Central Bank Governor Jean-Claude Trichet who will testify before the European Parliament's Economic and Monetary Affairs Committee at 1600 GMT. The March bund future is up 0.14 at 120.75, its next resistance level between 120.80-120.88, while the March gilt is up 0.06 at 114.23, with resistance at 114.35-114.42.

The dollar is narrowly mixed in very quiet trading as a holiday in the U.S. is ensuring that most investors are wary of pushing the U.S. currency too far either way. An early slide against the yen was quickly reversed, leaving the dollar trading nearly flat at Y118.21. The euro has managed to tick up slightly to $1.1943 with the market looking for ECB's Trichet to make hawkish comments later Monday. News earlier in the day that German producer prices rose by 1.2% on the month in January, instead of by the 0.4% that had been expected, only contributed to the impression that euro-zone interest rates may yet need as many as three more 25- basis-point increases before the end of the year.

The pound is up at $1.7436.

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TOP STORIES:

CIBA SELLS TEXTILE EFFECTS TO HUNTSMAN: Swiss Ciba Specialty Chemicals Holding Inc. (CSB) sold its Textile Effects business to U.S. peer Huntsman Corp. (HUN), after a months-long search for a suitor. Huntsman takes over the unit, which generated sales of CHF1.28 billion in 2005, for CHF332 million in cash and assumed debt. (News Snap by Hans Schoemaker)

OECD ECONOMIC GROWTH SLOWED IN 4Q 2005: Economic growth in 30 of the world's richest economies slowed in the final three months of 2005, according to figures released by the Organization for Economic Cooperation and Development. (Data Snap by Paul Hannon)

BUBA NOT WORRIED OVER FLAT GERMAN GROWTH: Flat German economic growth in the fourth quarter is no cause for concern, the Deutsche Bundesbank said in its February monthly report published Monday.

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INSIGHT & ANALYSIS FROM DOW JONES NEWSWIRES:

=FOREX FOCUS: Concern that deflation might still pose a threat to Japan's economic recovery helped to keep the yen under pressure late last week. But Friday's strong gross domestic product data may yet prove to hasten, rather than delay, the Bank of Japan's decision to abandon its ultra-easy monetary policy as many had feared. (By Nicholas Hastings)

=CHARTING EUROPE: U.S. and European equity indexes reached new multiyear highs last week, but technical signs suggest that the risk for a sharp fall is increasing. (By Axel Rudolph)

=FOCUS: Aluminum stocks held by China's Shanghai Futures Exchange warehouses will likely rise by another 10,000 metric tons or so by the end this week, following a steady increase in recent weeks, analysts said.

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STILL TO COME

ET/GMT COUNTRY/PERIOD
1100/1600 EU ECB Chief testifies before European Parliament
Monetary Committee in Brussels
N/A US Presidents Day holiday; all businesses,
markets and government offices closed
N/A UK Rightmove Monthly House Price Index
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OTHER NEWS:

U.K.-listed platinum mining company Lonmin PLC said it has been in talks which could lead to an offer for the company. Lonmin didn't identify the bidder and stressed that talks are "very preliminary." (WSJ)

Schering AG (SCH.XE) reported a 17% rise in fourth-quarter net profit, reflecting strong demand for the German drug maker's contraceptives and multiple-sclerosis treatments. (News Snap by Gangolf Schrimpf)

The U.K.'s public sector saw its highest ever one-month surplus in January, with oil tax receipts sparing Chancellor of the Exchequer Gordon Brown's blushes ahead of the budget in March. (Data Snap by Andrew Peaple)

Mortgage lending in the U.K. eased back in January, despite news of a strong new year start for the housing market, British Bankers Association said. Total sterling lending to the U.K. private sector rose by GBP14.8 billion in January, an increase of 1.3% from the revised GBP10.2 billion reported in December. (Data Snap by Ilona Billington)

Gross mortgage lending eased back from the strong December total, but despite that was the highest January lending total on record, the Council of Mortgage Lenders said. In January gross mortgage lending totaled GBP23.030 billion, almost 33% higher than the GBP17.356 billion reported a year earlier. (Data Snap by Ilona Billington)

While December retail sales came in better than originally reported, German shoppers still kept a tight lid on spending during the Christmas season, revised data released Monday by the Federal Statistics Office showed. (Data Snap by Klaus Brune)

German producer prices accelerated once again in January, inflated by higher energy prices. Prices at German factory gates rose 1.2% on the month in January, bringing the year-on-year comparison to a rise of 5.6%, its highest level since July 1982, the Federal Statistics Office said. (Data Snap by Michelle Schmitz)

Switzerland-based SGS SA (SGSN.VX), the world largest quality control company, announced an overhaul of its board of directors under which Sergio Marchionne is expected to become chairman. (News Snap by Martin Gelnar)

Nedbank Ltd (NED.JO) reported that full-year net profit more than doubled as the banking group benefited from an ongoing recovery program and the strength of the South African economy. (News Snap by Angus Macmillan)

Militants holding nine foreign hostages in southern Nigeria said they attacked another oil facility Monday and blew up a military vessel in ongoing violence that has cut 20% of crude production in Africa's oil giant.

-By Vanya Dragomanovich, Dow Jones Newswires; 44-207-842-9487; [email protected]

(END) Dow Jones Newswires