Week of June 26, 2011 thru July 2, 2011

China Yuan Rises Against Dlr For 5th Month; +5.17 Y/Y

BEIJING (MNI) - The Chinese yuan continued to rise against the
U.S. dollar in June as part of the government's campaign to dampen
widespread price pressures.

The yuan rose 0.23% this month, compared with May's 0.18% rise,
April's 0.88% increase, March's 0.35% gain and February's rise 0.34%.

The yuan ended lower at 6.4640 against the U.S. dollar Thursday,
compared with Wednesday's close of 6.4635.

The State Information Center, a government think tank, said in a
report Thursday that consumer inflation is set to hit a new high
this month for the current cycle.

China To Raise Income Tax Threshold To CNY3,500: Xinhua

BEIJING (MNI) - The Chinese government will raise the personal
income tax threshold to CNY3,500 from CNY2,000 on September 1, the
official Xinhua News Agency said Thursday.

A draft announcement in April saw the proposed threshold raised to
CNY3000, drawing criticism as being inadequate in the face of rising

A short report from the news agency said the Standing Committee of
the National People's Congress agreed on the new threshold today.

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France Budget Min: Doing Everything To Save Greece, Eurozone

PARIS (MNI) - France's new budget minister, Valerie Pecresse, said
Thursday that rescuing Greece and preserving the euro remained a top
priority at the European level and that fiscal consolidation would
continue to guide domestic policy.

Previously minister for research and higher education, Pecresse
takes over for Francois Baroin, who was appointed Wednesday to succeed
Christine Lagarde at the helm of the Ministry for Economics and Finance.

In a radio interview, Pecresse expressed "great esteem" for Baroin
and predicted the two would form "a very good tandem."

ASIA FX: US Dollar Pinned Down Near Day's Lows on Greek Vote

SINGAPORE, June 30 (MNI) - The U.S. dollar traded near session lows
in the Asian afternoon Thursday, weighed down by a revival in risk
appetite amid optimism Greece will be able to implement its proposed
package of austerity measures.

Overnight, Greece's parliament finally approved a controversial
package of austerity and privatization measures, the first stage in the

The approval of the austerity plan, which includes an unpopular E28
billion in spending cuts and tax hikes as well as a highly controversial

Germany's ILO Employment Rises 39K In May To New High

-- May +39k, Apr +39k, Mar +44k, Feb +48k, Jan +69k, Dec +52k

FRANKFURT (MNI) - The number of employed persons in Germany rose
for the 16th consecutive month in May, reaching a new all-time high, the
Federal Statistical Office reported on Thursday.

May's 39,000 rise boosted the number of employed in ILO terms to
40.833 million, giving an average increase of over 44,000 per month
since the brief dip in early 2010.

The June PMI poll showed private sector job creation rising to a
three-month high, driven by a surge in the services. Industry hiring, by

China Bank Regulator Cracks Down On Wealth Product Abuses

BEIJING (MNI) - China's banking watchdog has ordered lenders to
stop trying to attract deposits by offering high-yielding wealth
management products.

A draft of regulations made available for public opinion is aimed
at cracking down on abuses in the marketing of wealth management
products which bankers admit are being used to lure deposits amid tight
liquidity conditions.

The regulations, which were published by the China Banking
Regulatory Commission late Wednesday, explicitly state that banks are

Japan May Construction Orders +25.5% Y/Y, 2nd Y/Y Rise in Row

TOKYO (MNI) - The value of construction orders received in May by
the 50 largest contractors in Japan rose 25.5% from a year earlier to
Y623.2 billion, a second straight year-on-year rise, the Ministry of
Land, Infrastructure, Transport and Tourism said on Thursday.

The May reading followed a rise of 31.4% in April, a fall of 11.0%
in March, a rise of 19.5% in February, a fall of 10.7% in January and a
rise of 13.1% in December.

The breakdown for the latest month follows (on-year changes in the
previous month in parentheses):

ASIA FX: US Dollar Falls, Risk Trades Supported on Greek Vote

SINGAPORE, June 30 (MNI) - The U.S. dollar held a weak tone through
the Asian morning Thursday as risk appetite was supported by the outcome
of Greece's parliamentary vote on its proposed package of austerity

After a nail-biter of a vote, Greece's parliament finally approved
a controversial package of austerity and privatization measures.

The approval of the austerity plan, which includes an unpopular E28
billion in spending cuts and tax hikes as well as a highly controversial
privatization plan pegged at E50 billion, came amidst fiery protests in

China Gov Thinktank: June CPI At New High; Need Rate Hike

BEIJING (MNI) - China's consumer price growth is set to hit a new
high for the current cycle in June and the government needs to raise
interest rates to bring real interest rates positive, a government think
tank said Thursday.

"It's inevitable to see a fresh high consumer price index growth in
June (for the current cycle)," said the State Information Center in its
latest research report published in the China Securities Journal.

The think tank, backed by the National Development and Reform
Commission, said recent sharp increase in pork prices, rising house

China PBOC Sterilization Rates Rise; Injects CNY94 Bln

BEIJING (MNI) - Rates on sterilization products sold by the
People's Bank of China rose at auction Thursday in response to tighter
liquidity conditions, while CNY94 billion was injected into the market
over the week, the seventh in a row that funds have been added.

In just the third auction of the product this year, a CNY15 billion
batch of three-year paper sold at a coupon of 3.89%, up from the 3.80%
fetched at a May 12 sale.

The bank also sold CNY5 billion in three-month paper at 3.0801%
versus the 2.9985% fetched on June 16 (last week's sale was suspended