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Germany's Finance Minister Wolfgang Schaeuble said on Monday that the German parliament is expected to approve a bill on financial aid for Greece before May 19, when the debt-ridden country holds next debt auction.

After a meeting with parliamentary leaders, the minister said German lawmakers have signaled their basic willingness to get the bill approved to defend the stability of the euro.

He said the bill will be presented before the parliament only when Greece concludes its talks with the European Commission, the European Central Bank and the International Monetary Fund. Schaeuble expects Athens to reach in a conclusion this weekend.

Eurozone members have pledged to provide up to EUR 30 billion loan for Greece, of which Germany's contribution would be EUR 8.4 billion, the largest. Meanwhile, France pledged to provide EUR 6.3 billion from its 2010 fiscal budget. IMF's contribution is expected to be between EUR 10 billion to EUR 15 billion.

Elsewhere, German Chancellor Angela Merkel said her country is ready to provide financial assistance to Greece, if Athens takes "tough measures" for next several years to cut budget deficit.

On Sunday, Greek Finance Minister George Papaconstantinou said his country is soon expected to conclude negotiations with the IMF.

IMF Managing Director Dominique Strauss-Kahn said the Fund, the European partners, and everyone involved in the financing effort recognizes the need for speed to activate the rescue package and talks will be ended in time to meet Greece's needs.


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The average monthly total cash earnings per regular employee in Japan rose 0.8% year-over-year to JPY 275,637 in March, data from the Ministry of Health, Labor and Welfare showed Friday. That was the first annual increase in twenty-two months. In February, earnings fell by a revised 0.6%.

Overtime pay growth accelerated to 11.7% from February's 8.1% as overtime work increased in factories.

Adjusted for inflation, the average total earnings grew 2.1% year-on-year following an increase of 0.6% in February. Earnings grew for the third successive month.

On a quarterly basis, the downturn in wage eased in the first quarter. Total cash earnings in the first quarter fell just 0.1% annually, compared to the 4.1% drop in the final quarter of 2009.

BNP Paribas economist Azusa Kato said the slowdown in quarterly wage fall was due to the narrowed negative margin on scheduled earnings and rebound of non-scheduled earnings to positive growth. "Consumption is picking up due to more than just fiscal stimulus, as household sentiment is improving because the worst seems to be over for both employment employee wages," the economist said.


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Asia-Pacific nations should employ capital controls to moderate short-term capital inflows that created asset bubbles and inflationary pressures in the region's developing countries, a UN agency said Thursday.

The United Nations Economic and Social Commission for Asia and the Pacific, or ESCAP, also urged governments to increase their social spending to consolidate the region's stronger-than-anticipated economic rebound.

"Governments must embrace this opportunity to secure the gains of the economic rebound by investing in social programs that directly benefit people hardest hit by the crisis," Noeleen Heyzer, UN Under-Secretary-General and ****utive Secretary of the ESCAP said.

The Economic and Social Survey of Asia and the Pacific 2010, an annual publication of ESCAP, points out that while monetary tightening may be necessary to rein in inflationary pressures, policy makers must be cautious about withdrawing fiscal stimulus packages, as an early exit would disrupt the fledgling recovery process.

According to the Survey, even at the height of this crisis, Asia and the Pacific was still the fastest growing region in the world, supported mostly by fiscal stimulus packages adopted by the region's biggest economies. The Survey finds that the outlook for 2010 has improved significantly, with Asia-Pacific region's developing economies forecast to grow by 7%, led by China 9.5%, and India 8.3%.

The Survey states that the governments have to re-balance the region with greater regional consumption through increased intra-regional trade, accelerating the development of an Asia-Pacific consumer market.

The Survey also recommends that Asia and the Pacific increase efforts to create a more integrated and sustained regional market, benefiting both national economies and a larger consumer class.

Increased social spending directly supports income security for households by providing food security, education and access to health care, reducing the need by poorer families to maintain precautionary savings to protect against adversity. These families will then able to contribute more to local economies and invest more in their own development, the survey stated.

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Europe is bracing for a moderate and uneven recovery, supported by the rebound in global trade and policy stimulus, the International Monetary Fund said Tuesday.

Growth in the region is expected to pick up during 2010-11, but the traditional drivers of recovery are likely to be weaker than usual, the Washington-based global lender said in its latest regional economic outlook for Europe.

However, in the near term, growth will continue to benefit from exports, fiscal support and an upswing in inventories. Improvements in investor and consumer confidence should raise domestic demand.

Nevertheless, with unemployment expected to increase, and with lingering difficulties in the banking sector likely to restrain credit supply, consumption and investment will remain lackluster, IMF added.

Confirming its earlier prediction, the IMF said the Eurozone economy would grow 1% this year and 1.5% in 2011. Risks to this outlook is broadly balanced, it added.

Further, the Fund said emerging Europe will face a key challenge of attracting and harnessing healthy capital inflows to restore economic growth.

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In early European deals on Friday, the U.S. dollar registered strong gains against other major currencies as traders seek refuge in safe-haven currencies on the back of a decline in stock markets on debt crisis in Europe. The dollar rose to near a 1-1/2-year high against the euro, near 1-year high against the franc and more than a 1-year high against the pound.

On the flip side, the dollar pared recent gains against the yen due to across the board rallying of the Japanese currency.

In the upcoming hours, traders will be focusing on economic reports such as the U.S. advance retail sales, capacity utilization, industrial production reports- all for April, University of Michigan's preliminary consumer confidence index for May and the business inventories for March.

Friday in early European deals, the U.S. dollar inched higher against the euro. The dollar rose to near a 1-1/2- year high of 1.2434 against the euro at 5:55 am ET, from a low of 1.2577 hit at 3:00 am ET. On the upside, the dollar may target around the 1.233 level. At present, the greenback is trading at 1.244 against the euro, compared to yesterday's close of 1.2534.

Rising from a low of 1.1155 hit at 1:35 am ET, the dollar rose to near a 1-year high of 1.1268 against the franc at 5:55 am ET. The dollar-franc pair, which was worth 1.1179 at yesterday's close, is now worth 1.1244. On the upside, 1.197 is seen as the target level for the US currency.

The dollar rose to more than a 1-year high of 1.4507 against the pound at 6:00 am ET. As of now, the dollar is trading at 1.4507, compared to yesterday's close of 1.4612. If the dollar gains further, it may target the 1.400 level.

The dollar pared its recent gains against the Japanese currency. Moving down from a high of 93.10 against the yen hit at 2:40 am ET, the dollar fell to a 3-day low of 92.27 at 5:40 am ET. If the dollar weakens further, it may target around the 88.00 level. Currently, the dollar is trading at 92.37 against the yen.

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Although, the outlook for the US Dollar index remained bullish last week instead it is expected from dollar that it will attract the investors in this week's Forex session. This is because the investors loose their confidence on the currency pair of USDGBP. This comes as the favor to the dollar for the next Forex opening session said by the market experts.

In the recent week it is seen that the economic data is playing mess with the euro and it is assumed that it will remain in loss in the opening market of the coming week. Where as GBP may be on rimple in the next week's opening because of the CPI data and April retail sales since there is a pressure of equities high correlation continues on GBP and there is neither an opening path for the GBP from the grab of Sterling which is the bullish currency of this week.

Financial markets are really out of control and there is an urgent need for effective regulation, German Finance Minister Wolfgang Schauble said in an interview to the Financial Times newspaper.

"I'm convinced the markets are really out of control," Schauble said in the interview published on Thursday. "That is why we need really effective regulation, in the sense of creating a properly functioning market mechanism."

Markets would not function properly if the risks and rewards are "completely unbalanced", the minister said. He also pointed out the need for transparency and standardization of products. "We need transparency for all market participants," he said.

Further, Schauble said over-the counter transactions must be regulated and attention must be paid to the ratio of financial transactions to the real exchange of goods and services. "They bear no relationship to each other," the minister said.

"We need new financial instruments to cope with the huge financial tasks that we face," Schauble said. "But, forgive my saying so, minimum profits of 25 per cent are simply unimaginable in the real economy. It isn't healthy."

According to the German finance minister, it is "very likely" that there would be no agreement on the adoption of a global financial transaction tax at the G20 summit in Canada in June. However, efforts would be made to see if such a tax can be implemented at a European level, he told the daily.

Late Tuesday, Germany's financial regulator BaFin banned short selling of debt securities by euro zone countries as well as shares of 10 large German financial institutions and insurance companies. Regulator also banned naked short-selling of Credit Default Swaps. The move took markets by surprise.

Germany has "a role as a locomotive", Schauble said, yet it will keep trying to reduce deficit and boost employment. Eurozone members with largest budget and trade deficits need more fundamental structural reforms to make themselves more competitive, he said. "Spain, for example, must solve its labor market problem."

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The global economic recovery is building steam led by strong growth in Asia although considerable risks remain, the Organization for Economic Cooperation and Development says. Its latest economic outlook report projected gross domestic product across OECD countries to rise by 2.7% this year and by 2.8% in 2011. In its last forecast in November, the OECD region was forecast to rise by 1.9% in 2010. The global economy is predicted to grow 4.6% this year.

In the U.S., activity is projected to rise by 3.2% this year and by a further 3.2% in 2011. Euro area growth is forecast at 1.2% this year and 1.8% next while, in Japan, GDP is expected to expand by 3% in 2010 and by 2% in 2011. The U.S. unemployment rate is expected to average 9.7% in 2010 before falling to 8.9% in 2011. The eurozone unemployment rate is forecast to average 10.1% both this year and the next.

"This is a crucial time for the world economy," said OECD secretary-general Angel Gurria. "Coordinated international efforts prevented the recession from becoming more severe but we continue to face huge challenges. Many OECD countries need to reconcile support to a still fragile recovery with the need to move to a more sustainable fiscal path."

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The financial stability of the euro area amid bad fiscal policy in certain member countries is the key issue the currency bloc is currently facing and not the value of the euro, the European Central Bank President Jean-Claude Trichet said Monday.

"The euro is a very credible currency which keeps its value," Trichet said, according to the text of an interview with French daily Le Monde, which was published on the ECB website. "The issue is that of financial stability within the euro area on account of bad fiscal policy in certain countries, in particular Greece."

"It is imperative that this be corrected," the policy maker said, adding that fiscal policies in large countries such as Germany, France and Italy were also not exceptions. He blamed fiscally challenged economies for terribly neglecting close multilateral surveillance, which was fundamental according to the stability and growth pact.

When asked about the prevailing nervousness in financial markets, despite a massive rescue plan, Trichet said investors would take some time to regain confidence and sentiment would be restored gradually. "The measures are so significant in terms of both their nature and their scale that there is no doubt that they will have a positive effect on the markets," he said.

The ECB chief said the mechanism to stabilize markets is taking place properly. He noted that the speed at which parliamentary decisions were taken in countries facing fiscal problems was "remarkable". Trichet ruled out Eurozone debt restructuring programme saying that it is substantially low compared to that of the U.S., Japan and the U.K.

The policy maker also denied any Anglo-Saxon conspiracy against the euro. "I simply believe that some international investors struggle to understand Europe and its decision-making mechanisms," he said. "They have difficulty in gauging the historical size of the European construction and in anticipating the capacity of Europeans to take decisions that are just as important as those taken a few days ago."

Further, he called for the establishment of the equivalent of a fiscal union in the euro area in terms of monitoring and supervising the implementation of policies on public finances. He expressed confidence that a quantum leap would be possible if Europe exploit everything the treaties, seen as the starting point of the fiscal union, permit and greatly improve the secondary legislation from Brussels.

Regarding the euro, Trichet said it is a credible currency which inspires confidence, the most important ingredient for the consolidation of Europe's economic recovery. Since its introduction eleven and a half years ago, average annual inflation has been below but close to 2%, in line with the ECB's definition of price stability. The euro's capacity to maintain its value is absolutely essential for the confidence of investors both inside and outside the euro area, he asserted.

With regard to economy, Trichet said recent data suggest economic growth in the second quarter would be slightly higher than expected. However, he urged caution as the region's future growth depends on the ECB policy makers' ability to strengthen confidence as quickly as possible.

Trichet repeated that the ECB is completely independent of governments and pressure groups of any kind. He reaffirmed that the interventions were aimed to enable certain markets to function more normally and that all the liquidity injected through these interventions will be absorbed.

Also on Monday, speaking at the 38th economic conference of Austria's central bank, Trichet said the ECB is not printing money. He reiterated the bank's commitment to preserve its primary objective of maintaining price stability.


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Japan's current account surplus increased in April from the previous year mainly due to a larger surplus in the trade gap, an official report showed on Tuesday. Separate data released today showed that during May, bank lending in Japan recorded the sharpest annual fall in nearly five years.

The Ministry of Finance said the current account surplus surged 88% year-on-year to JPY 1.24 trillion from JPY 660.6 billion in the previous year. The surplus, however, came in slightly below economists' expectations for a JPY 1.30 trillion surplus and was well below March's surplus of JPY 2.53 trillion.

A trade surplus of JPY 859.1 billion was recorded in April compared to the JPY 167.1 billion surplus a year ago. This was driven by growth in exports outpacing that of imports. Exports surged 42.7% annually to JPY 5.58 trillion, while imports grew 26.1% to JPY 4.72 trillion.

The surplus in the goods & services account stood at JPY 433.6 billion, in contrast to the JPY 260.9 billion deficit in the previous year. At the same time, the deficit in the current transfers account narrowed slightly to JPY 137.6 billion from JPY 138.4 billion in the previous year.

The income account surplus decreased to JPY 946 billion in April from JPY 1.06 trillion a year ago. The deficit in the services account was broadly unchanged at JPY 425.5 billion.

Meanwhile, the surplus in the capital & financial account decreased to JPY 49.3 billion from JPY 275.8 billion in the previous year. The financial account surplus shrank to JPY 72.8 billion from JPY 293.4 billion a year ago. This was largely due to other investment deficit rising to JPY 6.38 trillion from JPY 2.57 trillion last year.

Separately, the Bank of Japan announced that bank lending was down 2.1% year-on-year in May, marking its sharpest decline since August 2005. Standing now at JPY 396.12 trillion, it follows a revised 1.9% contraction in April.

Including trusts, bank lending was down 2% to JPY 458.75 trillion following the 1.8% decline in the previous month. By themselves, lending from trusts was down 1.3% annually in May to JPY 62.6 trillion.

The central bank also revealed that M2 money supply climbed 3.1% annually to JPY 777.2 trillion in May, slightly higher than forecasts for a 2.8% increase following the 2.9% gain in April. The M3 money stock was up 2.3% to JPY 775.1 trillion, exceeding expectations for a 2.1% increase following the 2.2% gain in the previous month. The L money stock climbed 2% annually to JPY 1.46 trillion.

Japan's new Prime Minister Naoto Kan is naming his cabinet today and he is due to be formally sworn in by Emperor Akihito. Deputy Finance Minister Yoshihiko Noda has been named as the new Finance Minister, a post left vacant by Kan. Noda is thought to favor spending cuts and fiscal consolidation to rein in Japan's large public debt level, which is the highest in the industrialized world.

Kan was elected prime minister by lawmakers on Friday, two days after the resignation of Yukio Hatoyama. The former prime minister stepped down over a broken election pledge to move a controversial U.S. military base out of the island of Okinawa.


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