* Germany, France agree on bailout fund boost-report* US 30-year bonds erase gains, fall nearly 1 pointBy Walter BrandimarteNEW YORK, Oct 18 (Reuters) - Prices of U.S. Treasuries turned lower on Tuesday afternoon, with 30-year bonds falling about 1 point, as renewed optimism about a solution to the euro zone debt crisis triggered a rally on Wall Street.Investors sold safe-haven assets and rushed into stocks, driving the S&P 500 over 2 percent higher, after British daily The Guardian said France and Germany had reached an agreement to boost the euro zone rescue fund to 2 trillion euros.The report, published on the paper’s website, said the liquidity injection into the fund would be part of a “comprehensive plan” to solve the region’s crisis to be endorsed at a meeting of European leaders this weekend.Many investors, however, were still skeptical about the chances of a quick solution to the euro-zone debt problems after German Chancellor Angela Merkel said more steps would be necessary to overcome the crisis.”We came in today with a strong bid,” said David Ader, head of government bond strategy at CRT Capital Group. “Then this last report hit from The Guardian saying that they come to an agreement, completely running against the grain of what we were hearing earlier from Merkel.”Trading volumes were just around average, Ader said, in a sign that investors were “not selling on conviction.”Benchmark 10-year Treasury prices fell 6/32 in price to yield 2.18 percent. Yields had fallen as low as 2.08 percent earlier, their lowest since Oct 7.U.S. 30-year bonds were down 28/32, yielding 3.17 percent versus 3.16 percent on Monday.

* Company’s financial adviser says has active sale processBy Tom HalsWILMINGTON, Del., Oct 17 (Reuters) - A judge declined to appoint a trustee to replace Solyndra’s management who were accused of not answering questions about the bankruptcy of the government-backed solar panel maker.”It’s clear this case does not rise to the level of failure to disclose that would mandate the appointment of a trustee,” said Delaware bankruptcy judge Mary Walrath.The bankrupt company’s chief executive, Brian Harrison, resigned on Oct. 7, and it has mothballed its manufacturing as it tries to find a buyer for its business.However, other senior managers remain in place, including W.G. Stover, the chief financial officer who refused to answer questions before a Congressional panel investigating the company.Company representatives also refused to discuss contracts in a meeting with the U.S. Department of Justice, which prompted the request for a court-appointed trustee.Solyndra filed for bankruptcy on Sept. 6, burdened with $783 million of secured debt and squeezed by falling prices for solar panels caused by an industry glut.The Department of Energy guaranteed a $535 million loan to the company that Solyndra has said may not be repaid in full.Its downfall has become a political embarrassment for the Obama administration, which had promoted Solyndra as an example of how it planned to spur development in clean energy technology.The company has also been the target of a Congressional probe since February and its headquarters were raided by the Federal Bureau of Investigation days after the bankruptcy filing.Monday’s hearing centered around an “initial debtor interview” where Department of Justice officials press company representatives for data to determine which information is meaningful for creditors.Solyndra officials at the meeting were asked about a 2008 press release in which the company trumpeted $1.2 billion in long-term contracts, far exceeding the company’s $250 million in cumulative revenues up to its bankruptcy.A Department of Justice official said he wanted to know if valuable contracts were involved in the sale of the company.The company officials declined to respond because contracts were cited in the FBI’s search warrant, according to Solyndra’s vice counsel, Benjamin Schwartz.Solyndra also argued against a trustee because it has brought in a turnaround specialist, Todd Neilson of Berkeley Research Group LLC, to take over running the company.Solyndra lawyers told the court they would provide more information about contracts at a meeting with creditors scheduled for Tuesday.After the hearing, Eric Carlson of Imperial Capital LLC who is advising Solyndra on the sale of its business, said there was active interest in the company’s operations from buyers in United States and five other countries.He said he would be meeting with potential buyers at a solar power convention in Dallas this month.The case is In re Solyndra LLC, U.S. Bankruptcy Court, District of Delaware, No. 11-12799

* China could take opportunity to consider reforms* Widening trading band may be next move* Yuan at 6.3785, up 3.31 pct so far this yearBy Lu Jianxin and Jacqueline WongSHANGHAI, Oct 14 (Reuters) - The yuan closed up slightly against the dollar on Friday due to bank clients’ dollar purchases late in the session, but traders said investors trimmed their expectations of yuan appreciation in the near term amid renewed Chinese-U.S. tensions on the currency front.The People’s Bank of China set its mid-point, from which the yuan can rise or fall 0.5 percent in a day, slightly weaker on Friday, adding fuel to speculation that the yuan’s steady gains seen so far this year may take a breather.Some traders believe China could take the opportunity of a slowdown in yuan appreciation to consider new reforms, with a widening of the yuan/dollar trading band possibly a next move.”China may feel frustrated that the yuan’s steady gains since the start of this year without any U.S. prodding still fail to convince U.S. politicians that it is moving towards the right direction,” said a trader at a U.S. bank in Shanghai.”Renewed U.S. pressure appears to be pushing China and the United States into a new round of a cat-and-mouse game in which China will make periodical yuan gains a political bargaining chip. This will mean a temporary pause in yuan appreciation.”Spot yuan closed at 6.3785 compared with Thursday’s close of 3.3820. It has now risen 3.31 percent since the start of this year and 7.02 percent since it was depegged from the dollar in June 2010.Before trade began, the PBOC set its mid-point against the dollar weaker at 6.3762 compared with Thursday’s 6.3737.The Chinese central bank, which uses the reference rate to signal the government’s intentions for the yuan, has let its daily fixing weaken every day since the U.S. Senate approved a controversial bill on Tuesday aimed at forcing Beijing to push the yuan higher against the dollar.CAT AND MOUSEAlthough the fate of the bill is uncertain in the House of Representatives, it has drawn sharp rebukes from Beijing.The PBOC argues that a stronger yuan would not on its own reduce the bilateral trade imbalance nor save American jobs.Many China-based traders believe that the Senate’s bill has come at a wrong time when major economies, including the world’s top two — the United States and China — need to cooperate to fight against a prospect of another global recession.The bill also comes after China had let the yuan appreciate steadily this year.”There is a feeling among Chinese traders that the United States is trying to manipulate China’s currency, although I am not discussing whether China manipulates it,” said a trader at a major Chinese bank in Beijing.”Renewed U.S. pressure has apparently interrupted the yuan’s steady appreciation seen for the bulk of this year,” he said. “Yuan appreciation is likely to be intermittent again and be subject to the political environment once more.”Some traders said that U.S. domestic politics was playing too much into Chinese-U.S. relations and was hurting ties.Candidates of U.S. presidential elections have made China an easy scapegoat of U.S. economic problems, vowing to punish China after being elected but rarely doing so later.U.S. Republican presidential candidate Mitt Romney on Thursday threatened trade sanctions against China if it does not halt what he said was currency manipulation, unfair subsidies and rampant intellectual property theft.And the Obama administration, under fire for not taking a harder line on China over its currency, appears set to move against the Asia export powerhouse on other fronts as next year’s U.S. election approaches.Until the yuan’s gains this year outside of obvious U.S. pressure, China had let the currency appreciate, largely intermittently ahead of major political events such as the meeting of the two countries’ leaders and publication of the U.S. Treasury’s currency reports typically in April and October.While the Chinese government paints a picture of resisting U.S. calls for a stronger yuan, it has made political concessions when tensions escalated in the past, until pressure lessened in early 2011.Such a pattern is now seen returning, propelling traders to forecast a pause in this year’s yuan appreciation for now.Offshore, one-year dollar/yuan non-deliverable forwards (NDFs) were bid at 6.4000 in late trade, falling slightly from 6.4070 at the close on Thursday.They implied yuan depreciation of 0.37 percent in 12 months from Friday’s PBOC mid-point, compared with depreciation of 0.48 percent they implied on Thursday.

The euro last traded down 0.5 percent at $1.3724, according to Reuters data. It had earlier been trading around $1.37. The euro had touched its highest level since Sept 16 during the previous session.U.S. stocks traded lower on data from China, combined with news of a fall in quarterly earnings from JPMorgan Chase & Co.China’s trade surplus narrowed for a second straight month in September, reflecting global economic weakness. ]ID:nL3E7LD191]The euro remained weighed down by a European Central Bank warning about the impact on the currency and the region’s banks of involving private sector bondholders in euro zone bailouts.

By Philipp Halstrick and Alexandra HudsonFRANKFURT/BERLIN, Oct 13 (Reuters) - Deutsche Bank would need 9 billion euros ($12.4 billion) in fresh equity if new EU stress tests imposed a 9 percent core tier 1 capital ratio, two people with direct knowledge of the bank’s finances said on Thursday.The bank would pass the latest European Banking Authority test if a 7 percent ratio were to be required, the sources told Reuters.Deutsche Bank declined to comment, but in separate remarks the bank’s chief executive said it would do all it could to avoid a forced recapitalisation.Josef Ackermann said the bank had enough funds of its own to cope with a crisis and added that writedowns of sovereign debt, or haircuts, combined with demands to boost bank capital could lead to a credit crunch in the real economy.The European financial watchdog is going to require banks to hold more capital than previously demanded in order for them to be able to withstand sovereign debt writedowns and a worsening economic situation.Ackermann, Germany’s most high-profile banker, said it was doubtful whether a blanket recapitalisation of European banks — a measure being considered by politicians in Germany and France — would help solve the sovereign debt crisis.”It is not the capital position which is the problem, but the fact that sovereign debt as an asset class has lost its risk-free status,” Ackermann told a conference in Berlin. “The key to the solution is therefore in the hands of governments, to restore confidence in the solidity of state finances.”He said it was key to ensure that banks had access to long-term financing from markets. “At the moment that is close to impossible for any bank,” he said.Before considering further measures to stabilise the euro zone politicians and regulators should consider the cumulative impact of proposals such as forced recapitalisation, a transaction tax and writedowns on bonds.”We need to find the right balance between stricter regulation of the financial sector and the impacts these have on the economy as a whole,” he said.Deutsche Bank’s obligation to retain Greek bonds had cost it 400 million euros this year, he said.Ackermann’s warning comes as Europe’s economic engine faces slowing growth in many of Germany’s top export markets as governments rein in spending to bring down high debt levels.The German government expects gross domestic product growth of 3 percent this year, which would provide vital economic stimulus to a euro zone that has become increasingly dependent on Germany as the debt crisis intensifies.

The Press Trust of India news agency had reported on Wednesday that Infosys was keen to acquire the Thomson Reuters’ healthcare business. The Business Standard newspaper also had reported on Sept 15 that Infosys was close to buying the business for $700 million to $750 million.Thomson Reuters said in June it was planning to sell the unit, which supplies healthcare data and analysis to companies, government agencies and healthcare professionals. The business generated revenue of about $450 million in 2010.Infosys posted quarterly results on Wednesday, following which its executives told reporters the company was looking for acquisitions across sectors including healthcare and life sciences.

Israeli Prime Minister Benjamin Netanyahu, who won overwhelming cabinet approval for the lopsided exchange at a special night-time session, has been under constant public pressure to bring Shalit home. He said the soldier would be reunited with his family “in the coming days.”Palestinians in the Gaza Strip greeted the agreement, brokered by Egypt and a German mediator, with celebratory gunfire. Hamas confirmed that it only remained to conclude technical arrangements for the trade.The breakthrough pact, after many false dawns in years of secret efforts to free Shalit since he was captured in 2006, has no direct bearing on Middle East peace negotiations.But it was likely to improve the climate for international efforts to restart peace talks. On the sidelines of the agreed swap, the United States said it was hopeful Israel and the Palestinians would hold a preliminary meeting to revive the negotiations on October 23 in Jordan.Prospects for peacemaking have been clouded by Palestinian President Mahmoud Abbas’s request for U.N. recognition of a Palestinian state and by Israeli settlement expansion, which Abbas has said must stop if negotiations are to begin again.A source involved in the talks said the long-elusive pact had been mediated by Egypt. Its role is likely to strengthen Israel’s ties with Cairo, which have suffered since the fall of Egyptian leader Hosni Mubarak in a revolution this year.Hamas leader Khaled Meshaal said Israel would release 1,027 prisoners in two stages. Within a week, 450 will be swapped for Shalit and the rest will be freed two months later. Twenty-seven women are among those due to be freed.WHO WILL BE FREED?It was not immediately clear how many of the prisoners had been jailed for attacks that caused Israeli casualties. Under Israeli law, opponents of their release have at least 48 hours to appeal to courts to keep them behind bars.Yoram Cohen, head of Israel’s Shin Bet internal security service told reporters 110 of the prisoners slated for release in the first stage would return home to the West Bank and East Jerusalem. Another 131 would go to the Gaza Strip, where they reside. Six Israeli Arabs were also on the list.Cohen said 203 prisoners from the West Bank would be exiled to the Gaza Strip or abroad. The move appeared to be an attempt by Israel to prevent Hamas from regrouping in the territory, controlled by Abbas’s Palestinian Authority.Two of the most famous Palestinian militants serving time in Israeli prisons are not part of the swap, Cohen said.He said he believed Hamas had softened its demands in the hope of winning favor with Egypt while unrest rocks Syria, a main ally of the group.Marwan Barghouti, a charismatic leader of Abbas’s Fatah faction serving five life prison terms for murder, and Ahmed Saadat, found guilty of ordering the murder of Israel’s tourism minister in 2001, will not be freed.While Shalit’s parents have publicly campaigned for his freedom, relatives of Israelis killed in Palestinian attacks have lobbied Netanyahu not to give in to Hamas by releasing prisoners with blood on their hands.”Murderers are going free and we feel for their victims’ families … but Gilad is coming home,” said a woman in the tumult of a crowd who sang and danced at a protest tent that Shalit’s family erected months ago near Netanyahu’s residence.There 6,000 Palestinian prisoners in Israeli jails are regarded as heroes of the Palestinian struggle against Israeli occupation and quest for statehood.”We are happy with this great achievement and we thank our God for that. But our happiness is mixed with sorrow because we were not able to gain the freedom of all prisoners,” Meshaal said in a televised address from Damascus.Israeli television quoted Netanyahu as telling Shalit’s parents that, ever since he took office three years ago, “I’ve been waiting for the chance to make this telephone call” to inform them of the deal.Shalit’s family had accused him of not doing enough to secure his release.Announcing to his cabinet, and television cameras, that a deal had been signed earlier in the day, Netanyahu said he feared time was running out for Shalit amid political upheaval in the Arab world.”I believe we have reached the best agreement possible at this time, when storms are raging in the Middle East. I don’t know if we could have reached a better agreement, or even achieved one at all, in the near future,” he said.”It’s possible that this window of opportunity would have closed for good and we never would have brought Gilad home.”In Gaza the families of men jailed for life by Israel waited to see if their names would be on the list. [nLE7LB3ZA]Israel has carried out several lopsided prisoner swaps in the past, notably in 1985 when hundreds of Palestinian prisoners were freed in exchange for several soldiers captured by a guerrilla group in Lebanon. [nL5E7LB3S8]The ordeal of Shalit, a fresh-faced corporal, transfixed Israel after the tank gunner was captured by militants who tunneled their way out of Gaza and then forced him back over the border.He was 19 at the time and had begun his mandatory three-year army service nearly a year earlier.Shalit, who also holds French citizenship, was last seen in a videotape released by his captors in September 2009, looking pale and thin.He received no visits from the International Committee of the Red Cross, despite many appeals.