BRUSSELS (MNI) - There is a slight improvement in the functioning of the secondary market for government bonds, but the European Central Bank remains cautious, ECB President Jean-Claude Trichet said on Thursday.

Trichet attributed the observed improvement to the fact that governments were taking hard measures to put their fiscal affairs in order and markets were taking notice of the new policies.

BRUSSELS (MNI) - The transparency of European Union bank stress tests is very important and will bolster investor confidence, ECB President Jean-Claude Trichet said on Thursday, but declined to give any more information about how the tests will be carried out.

Trichet said the decision by Europe's leaders to publish the results of the tests on July 23 was "very important" and that the ECB was "very happy" about it.

BRUSSELS (MNI) - There is a slight improvement in the functioning of the secondary market for government bonds, but the European Central Bank remains cautious, ECB President Jean-Claude Trichet said on Thursday.

Trichet attributed the observed improvement to the fact that governments were taking hard measures to put their fiscal affairs in order and markets were taking notice of the new policies.

LONDON (MNI) - The recent rise in Eurozone interbank borrowing costs should not be seen as a signal for monetary policy, European Central Bank President Jean-Claude Trichet said Thursday.

"I would say it would be a complete mistake to interpret what we are observing on the market as a monetary policy signal," Trichet told a press conference following the latest meeting of the Governing Council.

In this regard, Trichet noted that the banks could have asked for and received as much liquidity as they wanted at recent liquidity operations.

Source: U.S. Treasury Department Averages calculated by Market News International

Total Foreign Non- Bid/ amount Coupon add-on comps cover High % at Issue (Bln $) rate (Bln $) (Bln $) ratio Yield High

Average (Jan-97 to date) 0.121 2.26 2.493 59.66

FRANKFURT (MNI) - The European Central Bank's Governing Council decided at its monthly monetary policy meeting Thursday to leave its key interest rate unchanged, the ECB announced.

The bank said its key refinancing rate would thus remain at 1.0%, where it has been since a 25-point cut that was decided at the Council's May 7, 2009 meeting.

Source: International Monetary Fund World Economic Outlook, July 2010 Update Year/Year Annual percent change

Current Change From Final Forecast Apr 10 WEO ----------- ------------ --------------

2008 2009 2010 2011 2010 2011

BRUSSELS (MNI) - Europe is very important for Germany and the country is committed to integration and European initiatives, Christian Wulff, Germany's new Federal President, said on Thursday.

The German president, whose role is largely ceremonial, said his country would work with Europe to support financial regulation, strengthen budget rules and reduce imbalances in order to shore up the bloc's credibility.