FRANKFURT (MNI) - The German federal government confirmed Tuesday that it will sell about E5 billion in a top-up of its 3.00%-coupon July 2020 10-year bund on July 7.

The formal tender for the auction will be announced on Tuesday, July 6. Bids for the top-up are due by 09:00 GMT on Wednesday, July 7, with results of the allocation to be announced shortly thereafter.

The top-up tranche will settle on Friday, July 9.

FRANKFURT (MNI) - The German federal government is seeking bids Tuesday for the E6 billion top up of its 0.50%-coupon, two-year notes with a June 2012 maturity, the Bundesbank announced Tuesday.

Bids are due by 0900 GMT on Wednesday, with results of the allocation to be announced shortly thereafter.

Including the E13.0 billion outstanding of this issue, the top-up will boost the volume of the June 2012 Schatz to E19.0 billion.

The new tranche will settle on Friday, July 2. The issue matures on June 15, 2012.

FRANKFURT (MNI) - The European Central Bank said Tuesday that a total of E60.205 billion Eurosystem covered bond purchases had settled as of June 28.

As of June 27, settled acquisitions had totaled E59.872 billion, the ECB said Monday. The ECB plans to buy a total of around E60 billion covered bonds by the end of June 2010 at the latest.

The program is aimed at revitalizing a market segment that has been exceptionally hard hit by the financial turmoil.

PARIS (MNI) - French banks will have no problem paying back money they borrowed from the European Central Bank in a one-year refinancing operation that expires later this week, ECB Governing Council member and Bank of France Governor Christian Noyer said in a radio interview Tuesday.

By John Shaw

WASHINGTON (MNI) - Republican senator Susan Collins said Monday evening that she is not certain if she will support the final regulatory reform bill that could come before Congress this week.

In comments to reporters near the Senate floor, Collins said that she was reviewing the bill carefully before making a decision.

By Steven K. Beckner

(MNI) - Researchers at the Federal Reserve Bank of Cleveland have developed a new measure of inflation expectations which they say provides advantages over other commonly used measures.

Researchers Joseph Haubrich and Timothy Bianco say that inflation expectations are "still well anchored," but warn against "complacency" among Fed policymakers in a Cleveland Fed "Economic Commentary" posted Monday.

- Expanding Fed Balance Sheet Would Require 'Strict Scrutiny' - Eventual Asset Sales Need Not Mean Higher Fed Funds Rate - 'Differentiate' Funds Rate, Balance Sheet Moves

By Steven K. Beckner

(MNI) - Federal Reserve Governor Kevin Warsh warned Monday that if financial conditions continue to be volatile and "less supportive" of growth, the economy could suffer and said the recovery would benefit if volatility lessens.

- Expanding Fed Balance Sheet Would Require 'Strict Scrutiny' - Eventual Asset Sales Need Not Mean Higher Fed Funds Rate - 'Differentiate' Funds Rate, Balance Sheet Moves

By Steven K. Beckner

(MNI) - Federal Reserve Governor Kevin Warsh suggested Monday that, if anything, the Fed should consider shrinking its balance sheet at some point, though not now.

"Indeed, the Federal Reserve should continue to give careful consideration to the appropriate size and composition of its existing holdings," he said.