ZURICH (Reuters) – U.S. authorities now have statistical data from the ten Swiss banks being investigated by the United States for helping U.S. clients to dodge taxes, Swiss newspaper Neue Zuercher Zeitung reported on Saturday.

TagesAnzeiger, another Swiss newspaper, reported that the Swiss banks now had until Sept 23 to hand over more specific client data.

Credit Suisse (CSGN.VX), which is one of the banks under investigation, had already handed over data earlier in the week, while the nine other banks had handed over the data through an intermediary on Friday, NZZ said without citing any sources.

The newspaper also said the Swiss government had given them “plenty of rope” to do this.

Mario Tuor, spokesman for the Swiss department for international financial affairs, declined to comment on the NZZ and TagesAnzeiger reports, but he said: “We are still going for a solution on the basis of existing legal rules in Switzerland.”

Late on Friday, Reuters reported that the United States was drafting legal documents, seeking to force nearly a dozen Swiss banks and international banks with Swiss branches to disclose the identities of American clients that evaded taxes.

Also on Friday, Swiss newspaper Blick said that Switzerland had given the United States an estimate of the number of its citizens who used secret accounts to avoid paying taxes between 2002 and 2010.

Swiss foreign minister Micheline Calmy Rey said on Wednesday that Switzerland had given the U.S. statistical data about the extent of U.S. taxpayers, but had not handed over any bank client data.

Handing over statistical data is possible within the current Swiss law that protects banking secrecy.

Switzerland, a noted tax haven that is the global capital of offshore private banking, has been under attack from U.S. Justice Department and Internal Revenue Service officials conducting a broad criminal investigation into private banking services that U.S. authorities say enabled wealthy Americans to evade billions of dollars in taxes.

The Justice Department served a target letter in July on Credit Suisse, Switzerland’s second-largest bank, notifying it that it was the focus of a criminal investigation. American authorities also are probing HSBC (HSBA.L) and smaller Swiss private banks and cantonal banks, including Basler Kantonalbank, Wegelin and Julius Baer (BAER.VX).

The Justice Department is trying to determine the total volume of unreported accounts held at Swiss banks. Officials suspect the accounts hold assets in the tens of billions of dollars and possibly more.

(Reporting by Katie Reid; Editing by Toby Chopra)

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MARSEILLE, France (Reuters) – The United States pressed Europe’s strongest economies on Friday to give “unequivocal” financial support to weaker euro zone states to overcome a debt crisis that threatens the world economy.

“It is completely within the capacity of the stronger members of the euro area to absorb these costs,” U.S. Treasury Secretary Timothy Geithner said as G7 finance chiefs gathered in Marseille to discuss how to revive a stalling recovery.

“Those costs would be much, much greater for them and their economies if they sit here and do nothing, and they recognize that,” Geithner told Bloomberg Television in comments that appeared aimed primarily at EU economic powerhouse Germany.

With markets looking to the Group of Seven major industrial economies for some sign of a policy shift to help faltering growth, a G7 source said the meeting might after all issue a communique, which G7 chair France had said was not planned.

Ministers and central bankers were under pressure to calm the biggest confidence crisis in financial markets since the 2007-8 global credit crunch.

But a shock announcement that the top German official at the European Central Bank is leaving early in disagreement with the bank’s policy of buying euro zone government bonds to support the likes of Italy and Spain laid bare deep rifts over how to manage the debt crisis.

The ECB confirmed that chief economist Juergen Stark would retire nearly three years before his term is due to expire. His decision means Bank of Italy governor Mario Draghi will start his term at the ECB helm in November with a mountain to climb to restore its credibility in Germany, Europe’s biggest economy.

France has called for a coordinated response from the Group of Seven industrialized nations after mounting anxiety over Europe’s debt crisis and the fragility of its banks caused a big fall in world stock markets in recent weeks.

Differences between the economic problems facing the euro zone, Britain and the United States — which unveiled a $447 billion jobs package on Thursday — are complicating the task though, meaning one-size-fits-all solutions will not work.

IMF chief Christine Lagarde said in London before boarding a flight for Marseille that policymakers in advanced economies should use all available tools to boost growth and called for bold action to weather a “dangerous new phase” of recovery.

She also cautioned against too much fiscal consolidation in a climate of sputtering growth.

But a G7 source told Reuters a unanimous agreement at the Marseille talks on coordinated monetary easing was unlikely.

A source in Brussels has said the G7 would likely agree to keep monetary policy accommodative, slow fiscal consolidation in states where that is possible, and implement structural reforms.

Fears the global economy may be in its most difficult period since the collapse of investment bank Lehman Brothers have added significance to Friday’s talks but there has been little evidence of the unity of purpose shown in 2008 and 2009.

U.S. President Barack Obama’s new package of tax cuts and spending could lift U.S. growth by one to three percentage points in 2012 and add more than a million jobs.

But in debt-ridden Europe, there is little scope for fiscal stimulus, and where there is some wiggle-room — in Germany and Britain — there is no political appetite for it.

In an indication of the conflicting positions on policy, Canadian Finance Minister Jim Flaherty told Reuters TV decisive moves were needed to restore market confidence and said slowing fiscal consolidation too much would be foolish.

“I hope we would all agree we have to stay the course, that we have to go through the pain of fiscal consolidation. It’s not easy, it creates stresses in some countries, but it’s necessary, we have to get through this rough patch,” Flaherty said.

G7 finance ministers and central bankers trickled into the sunlit Mediterranean port city of Marseille around lunchtime and talks were due to start at 4:00 p.m. (1400 GMT).

A working dinner will be followed by briefings from around 9:15 p.m. local time (1915 GMT) by the French, German, Canadian and Japanese delegations and European Central Bank President Jean-Claude Trichet. The United States plans no briefing.

ASIA AS CONCERNED AS U.S.

With Asian economies deeply worried about the West’s debt crisis and slow growth, Japan said it will voice its concern on the euro zone debt crisis and seek support for its right to unilateral action over safe-haven buying pushing up the yen.

Bank of Japan Governor Masaaki Shirakawa told reporters in Marseille he hoped the talks would share frank views on the crisis and said it was vital that G7 finance chiefs came up with a “firm stance” to stabilize the world economy.

“There are various factors behind the world economy’s uncertainty but Europe’s debt problem is one major factor. It is important for Europe to tackle its debt problems for its own sake but it would also indirectly bring positive effects on Japan’s economy,” he said.

Finance Minister Jun Azumi said Japan would ask the G7 for its understanding on its intentions to counter yen rises.

Lagarde said policymakers must act now, “and boldly,” giving her blessing to more quantitative easing by central banks and saying the challenge was to find a pace of adjustment that was neither too fast nor too slow.

She said countries facing market pressures must push ahead with urgent fiscal consolidation, while there was scope for slower action in countries not at the mercy of market forces.

“If growth continues to lose momentum, balance sheet problems will worsen, fiscal sustainability will be threatened, and the scope for policies to salvage the recovery will disappear,” she said.

Decisions by the European and British central banks this week to keep interest rates unchanged accentuated the gloom in Europe but neither indicated that a cut was imminent, while Federal Reserve Chairman Ben Bernanke gave no hint of new stimulus to boost the economy in a keenly awaited speech.

“Despite speculation about new coordinated forex intervention, a standard final statement remains the most likely outcome,” Unicredit said in a research note.

The Organization for Economic Co-operation and Development says growth across the G7 could slow to an anemic 0.2 percent in the last quarter of 2011. Its chief economist Pier Carlo Padoan urged the G7 to send a clear signal it is ready to take action if growth slows further.

(Additional reporting by Daniel Flynn and Claire Watson in Marseille, John Irish in Paris, Keith Weir in London, David Lawder in Washington and Leika Kihara in Tokyo; Writing by Catherine Bremer, editing by Mike Peacock)

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BEIJING (Reuters) – China’s central bank has withdrawn at least 20 billion yuan ($3 billion) from some state-owned lenders via designated central bank bills, banking sources told Reuters on Friday.

State banks, including Industrial and Commercial Bank of China (1398.HK), China Construction Bank Corp (0939.HK) and Agricultural Bank of China Ltd (1288.HK), were required to buy the bills that were issued for them, the sources said.

“The move is a small punishment for the lenders who don’t toe the central bank line carefully enough,” an interbank market bond trader, who declined to be named, told Reuters.

But he added that the size of the operation was too small to have a real impact on overall interbank market liquidity.

“The overall market liquidity remains abundant,” the trader said.

“The central bank is expected to enhance its efforts in soaking up liquidity in the coming weeks,” he said.

The banking sources said the state-owned banks may have lent too strongly in August, for which the People’s Bank of China (PBOC) decided to give them a warning.

The PBOC declined to comment.

In a major step to mop up liquidity, the central bank has told banks to include their margin deposits in required reserves at the central bank, pulling an estimated 800-900 billion yuan ($125-141 billion) from the banking system.

Designated bills are usually adopted by the PBOC to tame lending of individual banks.

The central bank will target a few banks by forcing them to purchase a certain amount of bills at given prices.

The move is widely regarded as less potent to other administrative moves in control liquidity and lending, such as changes in bank credit quotas and required reserve ratios.

($1 = 6.384 Chinese Yuan)

(Reporting by China newsroom; Editing by Ken Wills)

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VERKHNECHONSK, Russia (Reuters) – Oil was discovered in 1978 deep under the forest floor in this corner of Eastern Siberia, but the challenges of drilling here were created hundreds of millions of years ago in a churn of silt and sea water.

“There was an ocean here, and it covered all this land,” Igor Rustamov, head of Verkhnechonskneftegaz, the TNK-BP (TNBP.MM) led operator of the field, said.

“There was a migration of liquids into the reservoirs.”

The modern-day result is one of the more difficult drilling propositions in the Russian oil industry — layers of hard rock and pockets of salt deep under the Siberian taiga, 1,200 km from the nearest major city.

The oil which emerges is shipped eastward through a newly built $25 billion pipeline and loaded onto tankers at the Pacific port of Kozmino, where it competes with Middle Eastern crude in the lucrative Asian market.

It also crosses the Pacific to refineries in the United States, where it has acquired a following as a replacement for crude from Alaska’s declining North Slope.

For all the field’s complexity, such challenges may be the new normal in Russia, the world’s largest oil producer, which is struggling to keep output steady at 10.2 million barrels per day as Soviet-era fields decline.

Fields like Eastern Siberia’s Verkhnechonsk, set to pump nearly 100,000 bpd this year and reach its plateau of over 150,000 bpd in 2014, are ever more complex and remote, but essential to maintaining Russia’s oil exports as the Soviet oil heartland of Western Siberia declines.

While the bulk of Russia’s output will come from those old fields — Western Siberia still holds nearly 3/4 of Russia’s reserves — East Siberia is keeping the oil flowing to growing markets of Asia via the ESPO pipeline, which is due to expand to 1 million bpd in 2012, or a tenth of Russia’s total output.

Western Siberia, too, requires heavy investment in technology to maximize output from crudely tapped wells, but the wells are already drilled and the pipelines, power lines and roads built.

In the east, oil companies face up-front costs to get oil flowing from fields surrounded by nothing but forest for hundreds of kilometers. Even drilling contractors willing and able to work here are harder to come by.

Up to $6 billion in investment have been committed to Verkhnechonsk with a view to healthy returns at oil prices from $75-$120 per barrel.

“I am positive that Verkhnechonsk will eventually be more profitable than Western Siberia,” Nikolai Ivanov, TNK-BP’s director for upstream planning, said in a telephone interview.

LOST GAS

High up on a rig, an operator tracks progress as length after length of pipe bears down through layers of rock, then gradually veers off to the side, using a state of the art tracking system to adjust the path as it goes, tapping the richest beds.

Seen from above on a map, the wells wend their way outward from the pad — more horizontal than vertical, said one rig worker at Pad 19, where one of a dozen contractors at the field, KCA Deutag, was drilling its newest well.

“If you take an ordinary pencil and bend it, it will break,” he said, drawing a parallel to the steel pipe used to drill the curving wells, some of them 2,800 meters long or more. “But what if the pencil is a meter long?”

Similar technology is in use at only one other Russian field: Rosneft’s (ROSN.MM) Vankor, a 300,000 bpd Arctic field, which this year has kept the country’s oil output at post-Soviet peaks with a stepped-up drilling campaign.

That oil companies are willing to spend billions of dollars to drill here is in part due to the government’s willingness to hand out exemptions on mineral extraction tax and export duty on crude.

The operators, encouraged by the duty break, had already decided to add a new drilling rig to speed up development at the field when the government, noting the rise in oil prices in the two years since it began to produce, canceled the exemption half a year earlier than planned.

The government defends the move, saying it is targeting internal rate of return of around 15 percent on behalf of the companies.

But ad hoc tax breaks for individual fields are controversial and may be consigned to the past if the government, due to implement a reform of export duty in October, follows through with a more radical move to field by field profit-based taxation.

“If things were done purely on the basis of economic considerations, perhaps some of these development projects would not be going ahead,” said Alexander Burgansky, head of oil and gas research at Otkritiye in Moscow.

“East Siberia is being incentivized not because it is the only way to sustain its oil production but that is what Russian government has decided to do,” Burgansky said, adding: “It also has political implications for the Asian markets and Southeast Asia.”

A more serious consequence of the field’s location is the fate of the associated gas extracted as a by-product of oil production from the gas-rich field. For lack of a nearby market, hundreds of millions of dollars worth of gas is burned off, or flared.

With an accelerated field development plan in place, the more oil it produces, the more gas it will have to flare.

“The lost revenue is taken into consideration, but it’s never in favor of the gas,” Rustamov said. “The most economical way of using the gas is to flare it.”

In Western Siberia, oilfields regularly burn power at their own plants and sell their excess electricity to the grid, if they cannot deliver it directly to Gazprom.

Far from the grid, Verkhnechonsk burns associated gas in two captive power plants which consume just 8.5 percent of the associated gas. A third, more powerful 63 mW plant will be built next year.

From 2013, when a new $168 million gas re-injection facility comes on line, it will be pumped back underground to wait for Gazprom (GAZP.MM) to build a new pipeline that could also link Verkhnechonsk to a market for its gas.

The gas export monopoly must build new pipelines in the area to supply Siberia’s own customers as well as to ship gas from its Chayandinskoye field to the Pacific coast, more than 2,000 km to the east of Verkhnechonsk.

Said Rustamov: “It’s just where Mother Nature put it.”

(Reporting by Melissa Akin, Editing by Douglas Busvine)

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Financial Times said the Irish budget deficit for 2010 will be higher than the latest estimates, while Nobel Prize-winning economist Joseph Stiglitz said European common currency future is under risk.

Pressure increase on the euro ahead of the Greek plans to outweigh sluggish revenue growth when the Greek Finance Minister announces the 2011 budget later on today.

However, the relative improvement in European fundamentals may help the euro to advance again, especially with the expected pumping of money by central banks, which aim to bolster recovery.

The dollar rebounded from eight-month low to a high of 78.43 from the day’s opening at 78.00, as depicted by the dollar index, which tracks the performance of the dollar versus a basket of major currencies.

The greenback managed to do an upside correction after being overbought, where it may change its direction after the release of US pending home sales for August which are expected to show decline to 3.5% from 5.2% and factory orders which are predicted to drop to -0.4% in August from 0.1%.

Worries in markets enhanced demand on refuges such as dollar and yen at the expense of risky assets such as stocks where European shares failed to follow the suit of its Asian peers as it dropped during early trading.

Concerning the euro-dollar pair, it plunged on the daily charts as the pair is currently trading at 1.3685 after touching a high of 1.3805 and a low of 1.3664, whereas the trading range for today is among the key support at 1.3570 and the key resistance at 1.4000.

Moving to the sterling-dollar pair, it opened on a gap today then it touched a high of 1.5825 before it slipped to a low of 1.5747 after Osborne has said that delaying the cuts may affect UK top credit rating, while the it pared some of the losses as PMI construction unexpectedly rose to 53.8 in September from 52.1.

Meanwhile, the pair is trading at 1.5794, whereas the trading range for today is among the key support at 1.5620 and the key resistance at 1.6260.

With regard to the dollar-yen pair, it climbed to a high of 83.86 but slipped in an attempt to do an upside correction after being oversold, but the pair failed to continue as it retreated to 83.26.

BoJ policy makers in their two-day meeting are expected to increase the 30-trillion yen credit program for lenders to encourage bank lending.

The dollar may rebound as it seems that the BoJ will not tolerate another fall to 83 where they may intervene in market again as what happened on September 15.

The trading range for today is among the key support at 81.60 and the key resistance at 85.40.

Published on Mon, Oct 4 2010, 11:09 GMT

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…while euro rebounds…

During the last couple of years investors got used to a positive correlation between the stock markets and the EURUSD or at least to the money flowing towards the USD in uncertain times. Yesterday, as the major stock indices hit fresh 2010 lows in a response to poor US figures, the EURUSD was on its way up. It actually skyrocketed from 1,22 to 1,25 – the biggest move in this direction since the downtrend began in Dec’09. It automatically spurred talks of investors selling the dollar on deteriorating US fundamentals, especially given the superb performance of German exporters. Would that be true, the euro could be on a longer trip up and fore mostly, market reactions would reverse (with the euro now gaining on the poor US data and sliding on good one).

The trick, however, is that the situation was influenced by the ECB drawing back cash from the giant annual repo. First of all, the European banking sector didn’t apply for as much of a roll-over (shorter term operations) as market expected – a sign of decent liquidity and a good news for the euro. Second, the operations could have caused some direct demand for the euro on the spot market. Therefore, one should be cautious with declarations of longer-term changes in attitude towards the euro.

Nevertheless, one could have observed some early signs of trend reversing or at least stabilization on the EURUSD for a while (not going for fresh lows despite negative influence of the stock markets and premiums on debts of many European countries still around the highs), and therefore yesterday’s shot upwards was more likely to happen. A key resistance for the pair at the moment lays at 1,2660.

…sending gold down

If the euro’s upshot surprised some investors, gold’s tumble left them speechless. Despite the dollar’s depreciation and elevated fears on the stock markets, gold not only didn’t move up but it literally crashed with ounce prices going temporarily below 1200 USD. Some link this directly to positive signs from the European banking sector (alleviating fears and thus prompting liquidation from long gold positions) but the true reason might be an exhaustion of demand. Gold prices might have just completed a full 5-wave structure (or are about to do so in a near future) sending prices from 680 to 1260 USD per ounce and a large scale correction may be around a corner.

Events to watch – payrolls, payrolls, payrolls

If there is anything capable of changing the market picture in a significant way it is definitely the payrolls release (8.30 ET, 14.30 CET). However, for this to happen, the data needs to at least show a rise in employment in a private sector by some 120k which was expected a week ago (actual expectations might have slipped since then). The consensus for the headline is at -110k because of (this time negative) an impact from the census hiring.

Published on Fri, Jul 2 2010, 08:54 GMT

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US equities gained and treasury yields gained, but currency and commodity markets wee mixed. The modest lift in optimism seems to have been inspired by Spain’s announcement of spending cuts worth €15bn, with Portugal expected to follow with their own new targets in the next few days. Also comforting was Portugal’s ability to issue €1bn bonds. The CRB commodities index rose 0.7%, although oil fell 1.2% (inventories reported higher), and copper struggled (-1.0%). Gold made a fresh record high of $1249. US 3mth Libor continued its rise, up 0.7bp to 0.43%. US 10yr treasuries followed equities’ lead and are 4bp higher in yield. The 10yr auction was solid, the yield on market and bids of 3 times the offered amount.

The US dollar index dipped in late Asian trading, but recovered fully in Europe/NY. EUR did the opposite, rising to 1.2740 in Asia, but falling back to 1.2620 in NY. GBP underperformed the majors, after a dovish BoE infl ation report, falling from 1.5050 to 1.4830. USD/JPY ground higher from 92.80 to 93.30.

AUD is little changed from its 0.8910 Sydney close, having tested 0.8980 during Europe.

NZD tested 0.7200 but fell back to 0.7110. AUD/NZD is slightly higher at 1.2535.

US trade defi cit widens from $39.4bn to $40.4bn in March. A 3.2% surge in exports (despite another fall in the lumpy civilian aircraft component) was more than offset by a broad-based 3.1% imports gain, which included a sharp jump in civilian aircraft and oil volumes (but not prices).

Euroland GDP grew 0.2% in Q1, refl ecting a similar sized gain in Germany, but softer 0.1% growth in France and a solid 0.5% bounce in Italy. Back revisions to national data were not incorporated in the fl ash Euroland estimate, so Q4 remains at 0.0% for now, but that may be revised higher when more GDP detail is published on 4/6. Other data included a 1.3% rise in Euroland industrial production in March, the tenth straight monthly gain after the collapse in output in late 2008/early 2009.

Estonia admission to euro approved. This will take place in January 2011, making Estonia the 17th country to adopt the euro (apparently it’s too late for them to back out now!).

Bank of England infl ation report. The BoE still sees infl ation above target for a while, but below 2% by 2012 which is most relevant when setting monetary policy. The Governor said he had seen the broad fi scal plans of the new coalition which included more aggressive budget cuts than committed to by the previous government. These were not included in the Bank’s projections but he welcomed them as they reduced the downside risk that would fl ow from adverse market reaction to lack of progress on the fi scal front.

UK labour market still fragile. Although benefi t claimant count unemployment fell 27k in April, the more respected but less timely household survey found a 53k increase in unemployment in Q1, and a 76k fall in jobs in the quarter.

Canadian trade surplus C$0.3bn in March. This narrower surplus refl ected a modest export fall and a 2% rise in imports. Other data included a 0.3% rise in March new house prices, the ninth in a row.

Outlook

AUD/USD and NZD/USD outlook next 24 hours: Australia’s employment report today poses risks for the AUD, which looks soggy and should remain below 0.9050. The NZD also looks weak in the short term, capped by 0.7200, and more likely to move towards 0.7050.

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Published on Thu, May 13 2010, 04:43 GMT

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