EMERGING MARKETS-Rouble leads emerging currency losses on rate cut hints

LONDON, April 17 (Reuters) - The prospect of deeper interest rate cuts took Russia's rouble more than 2 percent lower on Friday, knocking it off 4-1/2-month highs against the dollar, while Russian equity markets also slipped.

The rouble touched a low of 51.2 per dollar after central bank governor Elvira Nabiullina said late on Thursday the currency had found its equilibrium and its appreciation provided a basis for further rate cuts.

After slumping to around 80 per dollar in late 2014, the rouble has rallied as the oil market shows signs of having bottomed out and fighting in eastern Ukraine between pro-Russian separatists and Ukrainian government forces has eased.

"The rouble has appreciated so much recently that from the point of view of the central bank and government it makes sense to try and cap it so as not to erode too much the competitiveness gains they got from the depreciation," said Sebastien Barbe, head of emerging market strategy at Credit Agricole in Paris.

After markets close on Friday, Standard & Poor's and Fitch are due to publish ratings for Russia. Downgrades are seen as unlikely because of the more stable economic conditions seen in recent months.

Russian dollar-denominated stocks fell 1.5 percent and the rouble index also slipped as oil prices came down from 2015 highs, but they are up some 16 percent this month. The likelihood of rate cuts may boost local bonds though, with 10-year yields touching a new 4-1/2 month low around 10.3 percent.

Broader emerging market stocks also paused in a rally that earlier took the MSCI emerging markets index to a new seven-month high.

Though the benchmark gave up earlier gains to fall 0.2 percent, it was still headed for a third consecutive weekly gain after lackluster economic data in the United States persuaded more investors a rate hike from the Federal Reserve is less imminent than once thought.

The Asia Pacific ex-Japan index eased 0.2 percent but stayed near seven-year highs after a 2.3 percent gain for Shanghai shares.

In emerging Europe, Turkish stocks rose 0.8 percent while the lira fell 0.3 percent approaching the record lows hit earlier this week on back of pre-election tensions.

Hungary's forint remained under pressure near a three-week low against the euro after the European Union suspended a development fund payment over concerns about how Budapest allocated the money. Hungarian stocks also slipped, led by a 0.75 percent loss for its biggest bank, OTP.

For GRAPHIC on emerging market FX performance 2015, see link.reuters.com/jus35t

For GRAPHIC on MSCI emerging index performance 2015, see link.reuters.com/weh36s

For GRAPHIC on MSCI emerging Europe performance 2015, see link.reuters.com/jun28s

For GRAPHIC on MSCI frontier index performance 2015, see link.reuters.com/zyh97s

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see ) (Additional reporting by Sujata Rao; Editing by Mark Trevelyan)

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Britain postpones bill sale due to platform supplier problems

LONDON, April 17 (Reuters) - The UK debt management office postponed a tender of treasury bills on Friday citing technical issues with a third party platform supplier.

The UK DMO said it would make a further announcement at 1200 BST (1100 GMT), and that any bids already submitted would be deemed null and void.

Traders told Reuters that Bloomberg terminals were experiencing an outage on Friday morning. Bloomberg could not be immediately reached for comment. (Reporting by John Geddie; editing by John Stonestreet)

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'Reform or stimulus' policy divide grows as China slows

* China aims for 7 pct growth in 2015, a quarter-century low

* Some policy advisers calling for more stimulus

* Others call for structural reforms for sustainable growth

* Concern that monetary stimulus fuelling speculative bubble

By Kevin Yao

BEIJING, April 17 (Reuters) - With China's economic growth heading for a quarter-century low, think-tanks and advisers to the government are polarising into those calling for more stimulus to arrest the slowdown and a rival camp emphasising structural reforms as the route to sustainable growth.

The debate among the think-tanks, which influence decision-making but do not wield direct power, is reflected in the ambivalent mood music coming from China's leaders, who accept the need to adapt to a "new normal" of slower but better quality growth, while fretting that a deeper downturn could fuel debt defaults, unemployment and social unrest.

To prevent growth from dipping below 7 percent, some economists are urging Beijing to step up policy support on top of the two interest rate cuts since November and a reduction in the level of deposits banks must hold in reserve.

"Employment is a lagging indicator; if the slowdown persists, it will definitely affect employment," said a senior economist at a well-connected think-tank who declined to be named.

"We still need to cut interest rates, bank reserve ratios and taxes, (and) the exchange rate should become more flexible."

Employment is for now holding up despite signs of rising job losses in some regions, including the rust-belt northeastern provinces, which Premier Li Keqiang visited last week, pledging to "stand up to" the downward pressure on the economy.

"The real downward pressure may be even bigger than the headline figures," said an economist who advises the government.

"The biggest difficulty is not slowdown itself. Many debt-laden firms cannot repay bank loans, and we must boost the money supply as quickly as possible to reduce real interest rates."

The economist called for deeper cuts to banks' reserve requirement ratio (RRR) this year, probably by 3-4 percentage points from the current 19.5 percent, and some yuan depreciation to help exporters.

Despite the rate cuts and lower RRR, falling inflation has kept real borrowing costs high.

Lu Zhengwei, chief economist at the Industrial Bank, has also called for yuan depreciation to support growth, but China's leaders are concerned it would encourage a further outflow of capital. Premier Li has ruled it out, even as he conceded that the 2015 growth target won't be easy.

"They will have to cut interest rates and RRR and boost investment, which may only provide a short relief for the economy but cannot change the downward trend," said Lu.

BOOST OR BUBBLE?

But other advisers say Beijing should tolerate lower growth, chastened by the experience of its last heavy stimulus programme after the global financial crisis, which saddled state-owned enterprises and local authorities with a mountain of debt, run up sometimes for projects of doubtful value.

These advisers argue that reforms to make the economy more efficient and responsive to market signals, which in the short term means letting weak companies fail and unproductive jobs evaporate, will produce better quality growth, while excessive stimulus could promote dangerous asset bubbles.

"They (leaders) are worried about the economy, but policy steps have limited effectiveness due to excessive investment in the past," said an economist with a think-tank affiliated to the National Development Reform Commission, the top planning agency.

Cai Fang, vice head of the Chinese Academy of Social Sciences (CASS), a government think-tank, also wants more emphasis on reforms. He advocates relaxing rules on family planning and the household registration system, which ties people's access to services to their residential status.

"We have used a variety of approaches to appropriately stimulate economic growth, but they are apparently not very useful," he told a high-level conference last month.

"That will make policymakers realise that they cannot use traditional means to boost economic growth potentials and must look to reforms to unleash dividends."

Those dividends should include government's long-term goal of reducing the burden of debt in the economy, while excessive stimulus risks further inflating speculative bubbles.

"If we pump out more money through monetary policy, it will spur further crazy rises in the stock market," said another CASS economist. "The government is riding a tiger." (Editing by Will Waterman)

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Putin sees return to growth in Russia in under 2 years

MOSCOW, April 16 (Reuters) - President Vladimir Putin said on Thursday Russia's economy could return to growth in less than two years, even though he considers it unlikely that the West will lift economic sanctions over the Ukraine crisis soon.

In a televised call-in with the nation, Putin acknowledged that there were difficulties for Russia's economy, which has been hit by a fall in global oil prices as well as the sanctions.

But, asked about a prediction he made earlier that the economy could return to growth in two years, he said: "With what we are seeing now, the strengthening of the rouble and the growth in the markets ... I think that it may happen faster ... but somewhere in the region of two years."

Putin has made clear that he largely blames the West for Russia's economic problems, including the weak rouble, higher inflation and falling revenues.

The central bank expects the economy to contract by 3.5 to 4 percent this year and by 1 to 1.6 percent in 2016.

Sitting at a desk in a television studio in front of rows of telephone operators taking calls from viewers, Putin said the sanctions were politically motivated by Western powers which he accused of wanting to "contain" Russia.

"I think they do not relate directly to events in Ukraine," he said, adding the sanctions had remained in place even though Russia believed Kiev was to blame for the failure to implement a ceasefire deal fully in east Ukraine.

He said he had recently discussed the sanctions with business leaders.

"I told them we can hardly expect sanctions to be lifted now because they are purely political," he said.

Putin's ratings in Russia have soared since the country annexed the Crimea peninsula from Ukraine just over a year ago but relations with the West are at their lowest point since the Cold War ended nearly a quarter of a century ago.

Western leaders say they have overwhelming evidence that Moscow has provided pro-Russian separatists fighting Ukrainian government forces in east Ukraine with soldiers and weapons. Russia denies this and says the West was behind the overthrow of a Moscow-backed Ukrainian president in February 2014.

Putin, 62, has held a call-in almost every year since he was first elected president in 2000, answering questions on issues ranging from local housing problems to regional and international conflicts.

They have often been marathon performances, the longest lasting 4 hours 47 minutes in 2013, and been used by Putin to show he is in command and ready to address the people's problems, large or small. (Additional reporting by Elizabeth Piper, Vladimir Soldatkin, Lidia Kelly, Andrey Kuzmin, Polina Devitt, Jack Stubbs, Jason Bush and Maria Tsvetkova; Writing by Timothy Heritage; Editing by Elizabeth Piper)

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Russia's Putin says S-300 sale prompted by Iran's flexibility in talks

MOSCOW, April 16 (Reuters) - Russian President Vladimir Putin said on Thursday Iran's willingness and flexibility in trying to find a solution with the West over its nuclear programme had spurred his decision to renew a contract to deliver an S-300 missile defence system to Tehran.

But the president, in his annual televised call-in show, said Russia would still work "as one" with its partners in the United Nations over Iran and that deliveries of the S-300 would work as a deterrent in the Middle East.

"And now with the progress of the Iranian nuclear track - and that is obviously positive - we do not see any reason to continue to keep the ban (on the delivery of the S-300) unilaterally," he said. (Additional reporting by Elizabeth Piper, Vladimir Soldatkin, Lidia Kelly, Andrey Kuzmin, Polina Devitt, Jack Stubbs, Jason Bush and Maria Tsvetkova; Writing by Elizabeth Piper, editing by Timothy Heritage)

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Greek budget revenues beat target in March-deputy finance minister

ATHENS, April 16 (Reuters) - Greece's ordinary budget revenues in March stood at 4.2 billion euros, beating the country's target of 3.2 billion euros, deputy Finance Minister Dimitris Mardas told reporters on Thursday.

Ordinary net budget revenues exclude receipts from social security organisations and local governments. The figure differs from the one monitored by Greece's EU/IMF lenders but indicates the country's progress in repairing its finances.

Greece suffered a revenue shortfall in January and February because of lower tax receipts and is dangerously close to running out of cash in the coming weeks. (Reporting by Lefteris Papadimas; Writing Karolina Tagaris, editing by Deepa Babington)

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UPDATE 1-MOVES-Movaghar becomes BAML's CEEMEA DCM head, Presley joins

(Adds Presley's replacement at Credit Suisse)

By Michael Turner

LONDON, April 15 (IFR) - Bank of America Merrill Lynch has appointed Karim Movaghar to head its CEEMEA debt capital markets team and has hired Josh Presley from Credit Suisse to work on the syndicate desk, according to an internal memo seen by IFR.

Movaghar will report to Fernando Vicario and Marc Tempelman, co-heads of EMEA corporate banking and DCM. He replaces the recently departed Alex von Sponeck.

Movaghar has been BAML's head of emerging market and corporate debt syndicate since 2011, and before that was at Morgan Stanley.

Meanwhile Josh Presley will join the US house as a director, focusing on emerging market and corporate transactions.

Based in London, Presley will report to Jeff Tannenbaum.

At Credit Suisse, David Anthony, who is already on the syndicate desk covering corporates, will take on Presley's old responsibilities, according to a bank spokesperson. (Reporting By Sudip Roy, writing by Michael Turner; editing by Alex Chambers, Julian Baker)

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Germany declines comment on Greek bankruptcy plan report

BERLIN, April 15 (Reuters) - The German government declined comment on Wednesday on a story in German weekly Die Zeit which said Berlin was working on a plan that would allow Greece to receive financing from the European Central Bank even if it missed payments to creditors.

"The plan under discussion is aimed at allowing he ECB to continue financing of Greece in the event of bankruptcy," the Zeit article said. "In addition, Greek banks would be restructured, allowing them to continue to take part in central bank operations even after a state bankruptcy."

The article said that in exchange, Athens would have to show a readiness to cooperate and fulfill its reform obligations. (Writing by Noah Barkin; Editing by Caroline Copley)

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China's central bank asked lenders to check margin trading risk - memo

BEIJING, April 15 (Reuters) - The Shanghai branch of China's central bank has ordered commercial lenders to check for risks in their margin trading business, according to a memo obtained by Reuters.

The move comes after margin trading soared among brokerages, prompting regulators to clamp down on risky behaviour earlier this year.

The People's Bank of China (PBOC) ordered commercial banks to provide their margin trading accounts and a list of connected wealth management products, according to the document and two sources with direct knowledge. This was supposed to have been completed by the end of March.

In the second half of 2014, margin trading increased rapidly in Shanghai and Shenzhen, with data showing that banks are one of the main sources of margin finance funding, according to the memo. As a result, there was a need to ensure the business is transparent and control risks, it added.

The PBOC asked commercial banks to report risks and the measures that they will adopt to handle them.

The Shanghai branch of the PBOC could not be reached for comment.

"Last year, the PBOC started to tighten control over the WMP market, as proceeds from WMP were inappropriately invested, making the central bank's loan and deposit data less accurate," one of the sources with direct knowledge said.

(Reporting by Li Zheng in Beijing and Engen Tham in Shanghai; Editing by Nick Macfie)

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UPDATE 1-Russian navy ships in English Channel on way to drills

(Recasts with statement)

MOSCOW, April 14 (Reuters) - Russian navy vessels entered the English Channel on Tuesday on their way to the northern Atlantic for anti-aircraft and anti-submarine defence drills, the Northern Fleet said.

The squadron, led by the Severomorsk anti-submarine ship, had carried out drills in the Bay of Biscay and will later head for the northeastern Atlantic, a spokesman for the Northern Fleet said in a statement.

Russia's Interfax news agency had reported that the squadron would hold drills in the English Channel but the fleet's statement did not confirm this.

It is not unusual to have Russian warships in the Channel. NATO dismissed in November a Russian media report that a squadron of Russian warships had conducted military exercises there.

Relations between Russia and the West have sunk to post-Cold War lows since the start of the crisis in Ukraine. (Reporting by Gabriela Baczynska, editing by Elizabeth Piper)

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UPDATE 1-Nestle nears sale of frozen food unit to Brakes - source

(Adds Nestle declined to comment, Credit Suisse mandate, price range and background)

By Sophie Sassard

LONDON, April 14 (Reuters) - Nestle is in advanced talks to sell its frozen food unit Davigel to Brakes Group, owned by buyout fund Bain Capital, a person familiar with the situation said on Tuesday.

The talks, reported earlier by French daily Les Echos, are ongoing and a deal is expected to be signed soon, said the person, who asked not to be named because the discussions are private.

Credit Suisse is handling the sale for Nestle, which is expected to raise between 200 million and 300 million euros ($211-317 million), said a second source.

Reuters reported last year that Nestle was exploring a possible sale of Davigel and that Brakes Group was one of the potential buyers.

Davigel, which supplies frozen and chilled meals and ice cream to restaurants and hospitals, was part of the Buitoni frozen food business Nestle bought in 1989.

Nestle, the world's largest food company whose wide range of products includes Gerber baby food and Perrier bottled water, announced two years ago it was seeking to divest underperforming businesses.

Over the past few years, it has sold the PowerBar and Musashi brands to U.S. group Post Holdings, as well as its U.S. frozen pasta business to Brynwood Partners and the bulk of its Jennie Craig business.

It also sold a 10 percent stake in fragrance and flavor maker Givaudan in December 2013.

Nestle declined to comment, while Brakes Group and Credit Suisse were not immediately available for comment.

($1 = 0.9478 euros) (Reporting by Sophie Sassard in London; Additional reporting by Joshua Franklin in Zurich; Editing by Tom Pfeiffer and Mark Potter)

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UPDATE 2-China's new bank loans beat forecast, but monetary growth slows

(Repeats to fix formatting, with no changes to text)

* March new loans 1.18 trln yuan, vs f'cast 1.03 trln yuan

* March TSF 1.18 trln yuan, vs 1.35 trln yuan in Feb

* March M2 money supply +11.6 pct y/y, vs f'cast +12.3 pct

* Q1 new loans at 3.61 trln yuan, TSF at 4.61 trln yuan

* More policy steps expected to support growth

* FX reserves fall by $110 bln in Q1

By Kevin Yao

BEIJING, April 14 (Reuters) - Chinese banks made 1.18 trillion yuan ($189.87 billion) worth of new loans in March, beating expectations, as the authorities ramped up efforts to avert a slowdown in economic growth while lenders cut their exposure to the risky shadow financing.

Economists polled by Reuters had expected new local-currency loans at 1.03 trillion yuan in March, compared with 1.02 trillion yuan in February.

In spite of the expanded loans, growth in broad money supply slowed, which could put the central bank under more pressure to support the economy.

Broad M2 money supply (M2) in March rose 11.6 percent from a year ago, missing market expectations of 12.3 percent and slowing from February's 12.5 percent pace.

Outstanding loan growth was 14 percent in March. Analysts polled by Reuters had expected outstanding loans to grow by 14.5 percent, versus the previous month's 14.3 percent.

The People's Bank of China (PBOC) said that total social financing (TSF), a broader measure of overall liquidity in the economy, was 1.18 trillion yuan in March, versus 1.35 trillion yuan in February.

A KIND OF REFINANCING?

New bank loans totalled 3.61 trillion yuan in the first quarter, versus 3 trillion yuan in the same period last year, while TSF totalled 4.61 trillion yuan in the first three months, versus 5.6 trillion yuan a year earlier.

New loans in the first quarter made up for 78.3 percent of TSF, a rise of 24.1 percentage points from a year earlier.

"It seems like there's a refinancing under way from shadow banks to banks," said Tim Condon of ING.

"We get a large increase in loans but it doesn't translate into economic activity. It's just rolling over intermediary credit into the banking system. It's a healthy thing. We want to clean up shadow banks," he said.

Condon said the M2 growth data "is consistent with data that we are seeing across the economy, and that is that the all the activity indicators are slowing."

The central bank said after the data release that it will use a variety of policy tools to keep liquidity conditions appropriate and maintain "reasonable" growth in credit and social financing, and the borrowing costs for companies have declined.

The loan data came out one day after the government announced poor exports for March and one day before China announces its economic growth for 2015's first quarter. Economists expect GDP growth slowed to a six-year low of 7 percent.

FOREX RESERVES DROP

The central bank has cut interest rates twice since November, on top a cut in the amount of cash that bank hold as reserves in February, in a bid to keep liquidity conditions accommodative.

It has also guided short term money rates downward sharply in the interbank market, which finally began yielding results in April, with the benchmark seven-day bond repurchase agreement falling below 3 percent for the first time since Oct 2014.

The economy still faces persistent downward pressures due to a property market downturn, widespread factory overcapacity and elevated local debt levels, as global demand remains erratic.

China's foreign currency reserves - the world's largest - fell by $110 billion in the first quarter to $3.73 trillion, following a drop of about $50 billion in the previous quarter, amid signs of capital outflows.

Mark Williams, an economist at Capital Economics, estimated that the dollar's strength during the course of the first quarter may have shaved $130 billion off the dollar value of China's reserves, by reducing the value in dollars of reserves held in euro and yen.

"If that is correct, the PBOC was still a net purchaser of reserves in the first quarter, albeit on a much reduced scale," Williams said. (Editing by Richard Borsuk and Simon Cameron-Moore)

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JGBs little changed, 20-year bonds sold ahead of auction

TOKYO, April 13 (Reuters) - Japanese government bond prices were little changed on Monday, giving up early gains as brokers sold 20-year bonds ahead of an auction later in the week.

The 10-year JGB futures ended 0.01 point down at 147.72 , with trade volume one of the lowest so far this year.

They were slightly firmer in early trade, tracking gains in U.S. bonds on Friday.

The 20-year JGB yield rose 1.5 basis points to 1.130 percent ahead of Thursday's auction of 1.2 trillion yen ($10 billion) 20-year JGBs while The 10-year cash JGB yield rose 0.5 basis point to 0.340 percent.

In contrast, the five-year JGBs were solid with their yield falling 0.5 basis point to 0.090 percent even ahead of Tuesday's five-year JGB auction.

Market players see strong auction results as the Ministry of Finance has reduced the issue amount to 2.5 trillion yen this month from 2.7 trillion yen until March.

($1 = 120.6100 yen) (Reporting by Tokyo Markets Team; Editing by Muralikumar Anantharaman)

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GLOBAL MARKETS-Weak China trade data hammers Aussie, weighs on Europe shares

* Asia shares shrug off surprise fall in China exports

* Australian dollar takes big hit, euro dips vs dollar

* European shares pause after weak Chinese data

By Nigel Stephenson

LONDON, April 13 (Reuters) - A shock fall in Chinese exports hammered the Australian dollar on Monday, though expectations of fresh economic stimulus from Beijing helped Asian stocks higher

Chinese shares, which have been rallying on expectations of further steps to boost the economy, hit seven-year highs on Monday even after data showed exports fell 15 percent in March while imports contracted at their fastest rate since May 2009. Economists had forecast a 12 percent increase in exports.

The Australian dollar fell nearly 1.5 percent after the data from China, which is the main market for Australia's exports of natural resources.

The Aussie was last down 1.4 percent at $0.7567, its weakest since April 2.

Adding to the gloom for the Aussie, the World Bank also cut its 2015 growth forecasts for developing East Asia and China.

"All of that provides quite a negative picture for the Aussie, particularly as the data we had overnight was very much driven by a decline in exports, which is going to be seen as quite a negative factor for the region," said Ian Stannard, head of European FX strategy at Morgan Stanley in London.

The Chinese data also weighed on sentiment in Europe. The pan-European FTSEurofirst 300 share index .FTEU3>, which touched its highest level since 2000 on Friday, edged lower.

In Asia, MSCI's main index of Asia-Pacific shares outside Japan rose 0.5 percent, heading back towards its highest since September, reached last week.

China's CSI300 index closed 1.8 percent higher while the Shanghai Composite rose 2.2 percent.

"We continue to expect more monetary easing for a variety of reasons, and the trade data offers further support for this," Oliver Barron, analyst at China-focused investment bank NSBO said in a note to clients.

Tokyo's Nikkei 225 index ended flat in choppy trade as investors took profit on gains in major stocks such as Toyota Motor Corp after the index hit 20,000 last week.

EURO DOWN

The euro was down 0.4 percent at $1.0563, a four-week low. Data on Friday from the Commodity Futures Trading Commission showed speculative investors' short euro positions, or bets the single currency will weaken, were only slightly below the previous week's record high.

The European Central Bank is one month into a 19-month asset-purchase programme, helping weaken the euro.

The dollar index, which measures the greenback against a basket of currencies, edged up. The U.S. currency was up 0.1 percent against the yen at 120.36 yen.

Sterling hit a fresh five-year low, under pressure from Friday's weaker-than-expected UK industrial output data and concerns about political uncertainty after next month's British general election.

In fixed income markets, Italian yields held firm before an auction that kicks off the busiest week of euro zone debt sales in almost a year. Italy's 10-year yields were flat at 1.23 percent.

The ECB programme has pushed euro zone government bond yields lower, with German 10-year yields hitting a record low of 0.14 percent last week. Germany will sell 10-year bonds later this week.

Crude oil prices rose as traders bet a slowdown in U.S. drilling would contribute to higher prices. Brent crude were last up 58 cents at $58.46 a barrel.

The stronger dollar helped push gold lower for the fourth session in five. It last traded at $1,204.90 an ounce. (Additonal reporting by Jemima Kelly in London, Blaise Robinson in Paris and Lisa Twaronite in Tokyo; Editing by Catherine Evans)

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UPDATE 1-D.E. Shaw in talks to buy Italian NPL business from GS -sources

(Adds details)

By Massimo Gaia

MILAN, April 13 (Reuters) - U.S. investment firm D.E. Shaw has started exclusive talks to buy the Italian non-performing loan business of Archon, a real estate unit of investment bank Goldman Sachs, two sources close to the matter said.

The New York-based firm will have about two weeks to negotiate exclusively the purchase of a 2-billion euro ($2.1 billion) portfolio of Italian non-performing property loans as well as the platform and staff to manage it, the sources said.

D.E. Shaw, which had $36 billion in investment capital as of March 1, did not respond to requests for comment. Goldman Sachs had no comment. KPMG, which is advising Goldman on the deal, had no comment.

The move by D.E. Shaw highlights international investors' growing appetite for Italian assets at a time when reform efforts in the country gather momentum and there are tentative signs its economy could leave a three-year recession.

Investment firms Fortress, Pimco and Bayview Asset Management were also in the running for the Italian arm of Archon. ($1 = 0.9475 euros)

(Writing by Danilo Masoni, editing by Valentina Za)

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Pimco Total Return Fund slashes US government-related holdings in March

NEW YORK, April 10 (Reuters) - The Pimco Total Return Fund decreased its exposure in U.S. government-related securities to 21.60 percent in March, from 35.29 percent in February, according to Pimco's website on Friday.

Pimco Total Return Fund's mortgage holdings held steady at 32.91 pct in March, compared with 32.86 percent in February, Pimco said.

(Reporting By Jennifer Ablan; Editing by Chris Reese)

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UPDATE 1-Pimco Total Return Fund slashes US government-related holdings in March

(Adds asset allocation shifts in non-U.S. developed, emerging market holdings, paragraphs 2-9; adds byline)

By Jennifer Ablan

NEW YORK, April 10 (Reuters) - The Pimco Total Return Fund decreased its exposure in U.S. government-related securities to 21.60 percent in March, from 35.29 percent in February, according to Pimco's website on Friday.

Pimco Total Return Fund's mortgage holdings held steady at 32.91 pct in March, compared with 32.86 percent in February, Pimco said. Most notable was Pimco Total Return Fund's exposure in non-U.S. developed holdings, which increased to 2.56 percent in March, compared with a negative position of 2.70 percent in February.

The Pimco Total Return Fund, with assets under management of $117.4 billion at the end of March, remains the world's largest bond fund, although it is now only slightly bigger than the Vanguard Total Bond Market Index fund, which has assets of $116.8 billion.

The March asset allocation moves in the Pimco Total Return Fund, the Newport Beach, Calif.'s flagship portfolio, corroborates with recent market views by Dan Ivascyn, Pimco's Group Chief Investment Officer.

Ivascyn has said that Pimco believes "lower neutral policy rates is now largely priced into the markets, and thus we see limited upside for high quality duration over the cyclical horizon. As such, our preference is to position Pimco portfolios flat to modestly underweight high quality duration like U.S. Treasuries, U.K. Gilts or German Bunds."

At the end of March, the Pimco Total Return Fund held 6.75 percent of its portfolio in investment-grade credit and 4.83 percent in high-yield junk bonds, according to its website.

Pimco saw select opportunities in emerging markets.

The Pimco Total Return Fund increased its exposure in the sector to 23.96 percent by the end of March, compared with 18.09 percent the previous month.

Ivascyn said going into 2015 that weaker commodity prices, a stronger dollar and a potential shift in Federal Reserve policy should weigh on the emerging markets as a whole over the next year. "This should result in attractive investment opportunities for the long-term investor," he said about emerging markets. "For example, local rates in Mexico are attractive given the high yields offered in the context of a high quality country with strong linkages to the U.S." (Reporting By Jennifer Ablan; Editing by Chris Reese and David Gregorio)

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CORRECTED-Main players in Ukraine debt battle prepare to face off

(Drops word French in para 10)

By Sujata Rao

LONDON, April 9 (Reuters) - Three years after facing off over Greece's debt workout, the two giants of debt restructuring - Lazard and Blackstone - are again preparing to do battle, one for Ukraine and the latter on behalf of its creditors.

The aim of having private investors take a $15.3 billion hit on their Ukrainian debt holdings as part of a $40 billion international rescue package sounds like peanuts compared to Greece, where creditors took a 75 percent haircut on 200 billion euros of debt. But Russia's involvement this time is injecting an extra frisson: accused of supporting an anti-Kiev insurgency, Moscow is also a prominent creditor potentially capable of derailing the plan.

Another prominent player is Franklin Templeton, one of the world's biggest asset managers, whose star investor, Michael Hasenstab, has staked over $6 billion of clients' money - and his reputation - on Ukraine.

Here are profiles of some of the main players in the talks.

UKRAINE

NATALIA YARESKO - Ukraine's U.S.-born finance minister, a former State Department official and fund manager, received Ukrainian citizenship only last December when she took up the job. She speaks fluent Ukrainian, albeit with an old-fashioned accent common to descendants of Ukrainian immigrants in North America.

For a Ukrainian government salary a tiny fraction of what she once earned, Yaresko is said to work from 7:30 a.m. to midnight as part of her mission to put Ukraine's finances on track. She says her private sector experience makes her sensitive to the creditors' interests.

Her message to investors has been clear: first, the $15.3 billion target is "set in stone", and second, Greece's restructuring experience proves Ukraine must cut its debt, rather than just extending bond maturities.

RUSSIA

SERGEI STORCHAK - Moscow has rejected restructuring and says it will not participate, arguing the $3 billion Ukrainian Eurobond it holds must be classed as bilateral rather than private debt.

Deputy Finance Minister Storchak, who negotiated the repayment of $21.3 billion to the Paris Club of creditor states in 2006, has been arguing Moscow's position. He was arrested in 2007 on embezzlement charges that were dropped for lack of evidence.

LAZARD

BOZIDAR DJELIC - A former Serbian finance minister and Belgrade's EU entry negotiator, Djelic heads the team advising Ukraine at Lazard.

Djelic joined Lazard only last year but the firm, since advising Indonesia in the 1970s, has built a fearsome reputation in sovereign restructurings, most recently forcing Greece's creditors to take the 75 percent haircut.

Djelic, who speaks six languages and has an MBA from Harvard Business School, has worked for Credit Agricole and McKinsey, among others, and in the early 1990s advised the Russian and Polish governments on privatisations. In 2012, he ran for president of the European Bank for Reconstruction and Development (EBRD), arguing that as a "transition citizen", born in Serbia, raised in France and educated in the United States, he was ideally placed to lead the institution.

Whatever his negotiating skills, observers reckon he has a strong hand. "Generally speaking, in sovereign debt restructurings, debtors have a decisive advantage," said Mark Walker, head of sovereign advisory at Millstein and Co. in New York and a former senior advisor at Lazard who co-led the recovery team for Greece in 2011-2012.

"In Ukraine's case, the creditors would be hard pressed to recover payment because the country likely doesn't have any resources outside the country they can seize, and no resources inside the country with which to pay."

FRANKLIN TEMPLETON

MICHAEL HASENSTAB - The fund manager, known for pulling off big contrarian bets in Hungary and Ireland, may have met his match in Ukraine, where he holds over a third of sovereign Eurobonds. Hasenstab has stayed silent on Ukraine, other than a video shot in Kiev last April, in which he said he was confident Ukraine would flourish over the next 5-10 years.

But with a big writedown on Ukraine looming, investors made net withdrawals of $2.24 billion from the $69 billion Global Bond fund last year, according to Lipper data. Most of the outflows happened in December

"By taking a large share of the market of a small country, Templeton and Hasenstab became hostage to their own investment policy," one bondholder said. "I can't see what choice they have now. They can block restructuring but if it becomes distressed debt, they may have to sell at a loss."

Templeton has also set up a creditors' committee, hiring Blackstone and law firm Weil Gotshall to advise it. But its supposedly high-handed methods have irked some other creditors.

"Franklin isn't talking with anyone," said one person who holds Ukrainian debt. "Other bondholders are talking, so the question is, will they play ball or try to strong-arm the rest of us?"

BLACKSTONE

MARTIN GUDGEON - Advising Ukraine's creditors is the latest in a series of high-profile roles Blackstone has landed in Europe since Gudgeon joined the firm as head of European Restructuring in 2007. He is among the top global names advising on how to deal with multi-billion dollar debt piles; assignments from his past include Italy's Parmalat, Dubai World and UK bank Northern Rock.

Interestingly, Gudgeon sat on the other side of the table in 2009 when Blackstone acted for Ukraine after the global crisis led to the default of state energy firm Naftogaz. Blackstone was paid 1 million euros a month for this, with bodyguards for employees thrown in, the Financial Times reported at the time.

Under Gudgeon, Blackstone won the prize mandate of advising Greece's creditor committee in 2011, helping ensure that new notes swapped for old ones were under English law and effectively guaranteed by the European Financial Stability Facility. That made it hard for further cuts to be made to this debt. (Additional reporting by Natalia Zinets and Alessandra Prentice in Kiev; Ivana Sekularac in Belgrade; Jason Bush in Moscow)

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UPDATE 2-IMF sees Brazil economy shrinking, growth hinging on austerity

(Adds IMF recommendations on Petrobras, tax reform, productivity)

By Alonso Soto

GOIANIA, Brazil April 10 (Reuters) - The Brazilian economy will likely shrink this year, but the South American country could return to growth in 2016 if it succeeds in boosting investor confidence with its austerity drive, the International Monetary Fund said on Friday.

The IMF lowered its 2015 forecast for Brazil's economic performance to a 1 percent contraction from the 0.3 percent growth it forecast in January due to tighter fiscal and monetary policies and a drop in investment by state-run oil company Petrobras.

The IMF said an "immediate priority" for Brazil's recovery is swift resolution of problems at Petroleo Brasileiro SA, as Petrobras is formally called. A massive political kickback scandal at the company has forced it to cut back investment and has paralyzed work by its construction and engineering contractors.

The IMF said implementation of austerity measures is crucial for Brazil to regain the trust of investors so it can bolster growth.

"Determined implementation of these measures should help restore confidence and foster a recovery in growth and investment in due course," the IMF said in a press release following an assessment of Brazil's financial and economic situation by its executive directors.

Faced with an imminent recession, President Dilma Rousseff has embarked on an aggressive drive to cut public spending and raise taxes to balance the government's overdrawn accounts.

Finance Minister Joaquim Levy told a business group in the central Brazilian city of Goiania on Friday that the belt-tightening is needed to guarantee sustainable growth in the world's No. 7 economy.

To achieve its fiscal goals this year the Brazilian government need "ambitious, front-loaded measures," the IMF said.

The IMF praised a decision to end a policy of funneling taxpayer money into state banks for subsidized lending that was implemented by Rousseff and her predecessor Luiz Inacio Lula da Silva to spur growth in the wake of the 2008 financial crisis.

It also backed the government's new focus on cutting current government spending and tax exemptions to allow room for priority spending on investment and social programs.

Brazil must simplify its tax system and reform its pension and wage indexation systems to reduce fiscal pressures, it said.

Supply-side reforms are critical for boosting economic productivity and priority should be given to investment in infrastructure and expanding the private sector's role, the IMF recommended.

It welcomed Brazil's scaling down of its daily foreign exchange intervention program and said use of the program should remain limited to allow for further depreciation of the country's currency. (Reporting by Alonso Soto and Anthony Boadle; Editing by Leslie Adler and Peter Galloway)

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Pimco Total Return Fund slashes US government-related holdings in March

NEW YORK, April 10 (Reuters) - The Pimco Total Return Fund decreased its exposure in U.S. government-related securities to 21.60 percent in March, from 35.29 percent in February, according to Pimco's website on Friday.

Pimco Total Return Fund's mortgage holdings held steady at 32.91 pct in March, compared with 32.86 percent in February, Pimco said.

(Reporting By Jennifer Ablan; Editing by Chris Reese)

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UPDATE 1-Pimco Total Return Fund slashes US government-related holdings in March

(Adds asset allocation shifts in non-U.S. developed, emerging market holdings, paragraphs 2-9; adds byline)

By Jennifer Ablan

NEW YORK, April 10 (Reuters) - The Pimco Total Return Fund decreased its exposure in U.S. government-related securities to 21.60 percent in March, from 35.29 percent in February, according to Pimco's website on Friday.

Pimco Total Return Fund's mortgage holdings held steady at 32.91 pct in March, compared with 32.86 percent in February, Pimco said. Most notable was Pimco Total Return Fund's exposure in non-U.S. developed holdings, which increased to 2.56 percent in March, compared with a negative position of 2.70 percent in February.

The Pimco Total Return Fund, with assets under management of $117.4 billion at the end of March, remains the world's largest bond fund, although it is now only slightly bigger than the Vanguard Total Bond Market Index fund, which has assets of $116.8 billion.

The March asset allocation moves in the Pimco Total Return Fund, the Newport Beach, Calif.'s flagship portfolio, corroborates with recent market views by Dan Ivascyn, Pimco's Group Chief Investment Officer.

Ivascyn has said that Pimco believes "lower neutral policy rates is now largely priced into the markets, and thus we see limited upside for high quality duration over the cyclical horizon. As such, our preference is to position Pimco portfolios flat to modestly underweight high quality duration like U.S. Treasuries, U.K. Gilts or German Bunds."

At the end of March, the Pimco Total Return Fund held 6.75 percent of its portfolio in investment-grade credit and 4.83 percent in high-yield junk bonds, according to its website.

Pimco saw select opportunities in emerging markets.

The Pimco Total Return Fund increased its exposure in the sector to 23.96 percent by the end of March, compared with 18.09 percent the previous month.

Ivascyn said going into 2015 that weaker commodity prices, a stronger dollar and a potential shift in Federal Reserve policy should weigh on the emerging markets as a whole over the next year. "This should result in attractive investment opportunities for the long-term investor," he said about emerging markets. "For example, local rates in Mexico are attractive given the high yields offered in the context of a high quality country with strong linkages to the U.S." (Reporting By Jennifer Ablan; Editing by Chris Reese and David Gregorio)

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EMERGING MARKETS-Emerging stocks rally as U.S. rate rises seen later

* Tepid Chinese data prompts speculation of more stimulus

* Russia's rouble extends week-long rally

* Optimism on Europe recovery lifts stocks in east of region

By Chris Vellacott

LONDON, April 10 (Reuters) - Emerging equities were headed for a second consecutive weekly gain on Friday on a perception that the United States will not see higher interest rates until late in the year, bolstering the appeal of non-dollar assets.

The MSCI emerging equities index was 0.4 percent higher, following strong trading in Asia that propelled the Asia excluding Japan index 0.6 percent higher.

Tepid Chinese inflation data prompted speculation of more monetary stimulus to prop up slowing economic growth, driving Shanghai shares nearly 2 percent higher to a seven-year high.

But analysts attributed much of the strength to a view spreading among investors that the U.S. Federal Reserve will not start raising interest rates until later in the year than originally expected. Higher U.S. rates and a strong dollar diminish the appeal of emerging assets.

"People think U.S. rates will not be hiked until September and it seems the markets are moving in that direction. We could have a couple of months of relative emerging market strength but I assume U.S. rate hike speculation will take hold again in May or June," said Per Hammarlund, Chief Emerging Markets Strategist at SEB.

Elsewhere, Russia's rouble extended a week-long rally, rising 1.6 percent against the dollar to a four-month high as fears of a prolonged financial crisis eased against a backdrop of a more stable oil market.

Turkey's lira fell 0.3 percent against the dollar following current account data showing a wider than expected deficit for February.

Optimism surrounding Europe's prospects for economic recovery helped lift stocks in Prague, Warsaw and Budapest by around 0.4 percent.

Fund flow data cited by bankers showed the market optimism is becoming entrenched, with emerging market-themed funds attracting more new money from investors.

Data from EPFR showed emerging credit funds gained 0.2 percent of their assets under management in the week to April 8 while local currency bonds added 0.14 percent of their assets.

Emerging equity funds saw a small decline in funds, losing 0.15 percent of assets over the week.

"Weaker than expected U.S. non-farm payrolls and mixed overall U.S. data led to lower U.S. Treasury yields and a weaker U.S. dollar, helping attract flows into emerging markets," Standard Bank analysts said in a note.

For GRAPHIC on emerging market FX performance 2015, see link.reuters.com/jus35t

For GRAPHIC on MSCI emerging index performance 2015, see link.reuters.com/weh36s

For GRAPHIC on MSCI emerging Europe performance 2015, see link.reuters.com/jun28s

For GRAPHIC on MSCI frontier index performance 2015, see link.reuters.com/zyh97s

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see ) (Editing by Alison Williams)

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GLOBAL MARKETS-Stocks surge: Nikkei tops 20,000, Europe hits 15-year high

* European markets open higher, after Nikkei tops 20,000 for first time in 15 years

* Greek repayment news helps lift risk sentiment

* China inflation flat, suggesting more easing ahead from Beijing

* Dollar on course for best week since 2011

By Marc Jones

LONDON, April 10 (Reuters) - World shares approached record highs on Friday, as hopes of more easy money from top central banks pushed Japan's Nikkei past 20,000 points for the first time in 15 years and European stocks reached similar heights.

The stock market push was complemented by another low for euro zone bond yields, after Greece repaid a loan tranche to the International Monetary Fund to keep alive its hopes of more aid.

Subdued Chinese inflation also led to talk of additional stimulus from Beijing, and upbeat data from major economies like the United States and Germany kept oil on course for a weekly gain of almost three percent.

The dollar was on course for its best week since 2011. The euro weakened and sterling tumbled on the day after the UK reported unexpectedly poor industrial production data.

"We look set for a strong finish to the week for European markets with further declines in European yields and the euro acting as the catalyst for new multi-year highs this week," Michael Hewson, chief market analyst at CMC Markets, said in a note.

Buoyed by gains in Asia and the latest slide in the euro, the pan-European FTSEurofirst 300 share index reached a 15-year high in early trading and headed for its ninth week of rises in the last 10.

Germany's DAX also scored a record high. Britain's FTSE 100, France's CAC 40 and the region's other main indexes all made ground.

Along with the ECB's stimulus programme and the weak euro, news that Greece had made a 450 million-euro loan payment to the IMF and secured extra emergency funding from the ECB for its banks also helped the mood.

Greek markets were closed for an Orthodox Greek holiday, but Greek bonds were heading for their best week in two months with yields down almost 3 percent. German Bund yields were also grinding back towards record lows.

"There was a bit of relief that they made that repayment yesterday and it looks like they're going to be able to pay that T-bill next week," Rabobank fixed income strategist Lyn Graham-Taylor said.

"But the market is whipping around. We're very, very far from any sort of resolution that gets us through the next six months to a year."

DOLLAR BULLS

The dollar was on track for its first weekly rise in a month as jobless claims data eased concern about the U.S. labour market and attention shifted back to the chances the Federal Reserve will raise interest rates this year.

Against a basket of top currencies, the dollar rose almost half a percent to a three-week high in morning trade in Europe, bolstered by diverging bond yields in the U.S. and euro zone that should pull capital into the world's largest economy.

Federal Reserve policymakers hinted this week that the U.S. may raise rates sooner than many expect, while European central banks have introduced negative interest rates and are printing money.

Against the euro, the dollar was up half a percent at $1.0607 its strongest since March 19. The euro has fallen more than 3 percent this week.

Sterling also slipped close to a five-year low against the dollar, after data showed British industrial output barely grew in February and construction shrank.

"It's hard to avoid the conclusion that carry trades are playing a part. Note that German bond yields out to 8 years are now in negative territory, the euro is very much a funding currency," said David de Garis, senior economist at NAB.

Among commodities, Brent crude oil futures remained firm after rising on Thursday on strong German economic data and uncertainty about negotiations on Iran's nuclear program.

Brent was little changed at $56.51 a barrel. But U.S. crude slipped 0.3 percent on the day to $50.36. Gold was also flat at $1,194.71 an ounce, down 1.3 percent so far this week following a three-week run of gains. (Additional reporting by John Geddie in London, Lisa Twaronite in Tokyo)

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BRIEF-Leclanche and Younicos partner on Graciosa project

April 10 (Reuters) - Leclanche SA :

* Younicos and Leclanche partner on Graciosa project

* Will provide complete Battery Energy Storage Solution (BESS), using its industry-leading lithium-ion batteries, which will be combined with Younicos Energy Management software

* Affiliate of Recharge, one of Leclanche's largest shareholders, will provide 3.5 million euros ($3.71 million) in convertible debt financing to project's operating company Graciolica, a wholly-owned subsidiary of Younicos Source text for Eikon: Further company coverage: ($1 = 0.9424 euros) (Gdynia Newsroom)

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Greece pleads cash running out, told to hasten reforms

BRUSSELS, April 9 (Reuters) - Greece made another plea to the euro zone for cash to avert bankruptcy but was told to present an improved list of economic reforms within six working days for finance ministers to pave the way for any more lending, EU officials said on Thursday.

Athens appealed for liquidity support at a meeting of deputy finance ministers in Brussels on Wednesday night but was told there must first be progress on the stalled list of measures to make public finances sustainable.

"From the Greek side there was a strong statement that liquidity is getting really bad and there was an appeal to release some type of liquidity support before the euro zone finance ministers' meeting on April 24," a euro zone aide said.

"But no one knows how this could be done -- there is no willingness to provide support before there is some progress in terms of the reform programme," the official said.

Greece told the same forum last week that it would have difficulty paying back an instalment to the IMF due on Thursday and covering its expenses for wages and pensions. But it subsequently said it would make the IMF payment on time.

Officials said euro zone experts were not convinced the liquidity position was a dire as portrayed by Athens, and some suspected an attempt to scare creditors into releasing funds.

Greece's creditors are determined to use their leverage to push through long delayed reforms that Prime Minister Alexis Tsipras' leftist government is resisting on social grounds.

"The mood was better than last time, but the substance was as murky as ever," another euro zone official said of Wednesday's talks.

There was a slight improvement in technical cooperation between Greece and the lenders, but little progress on the content of the reforms.

"We are still lacking detail on specific measures, especially in terms of their fiscal implication and time is getting very short -- decisions should be made on April 24 which is the next meeting of the Eurogroup in Riga," he said.

Once Athens agrees on a set of measures with its creditors -- euro zone governments and the International Monetary Fund -- and passes laws through parliament to implement them, it could get 7.2 billion euros that remain to be disbursed from its existing 240 billion euro international bailout.

But after 10 weeks in office the Tsipras government has been unable to agree with lenders, mainly because many of the measures run counter to his election promises to put an end to austerity and refuse "recessionary" measures.

As a result, Greece has not had any new funding from the euro zone or the IMF. Since it remains cut off from markets and the European Central Bank has rationed emergency funds for its banks, Athens says it is quickly running out of money.

If Greece and representatives of the creditors, now known as the Brussels Group, agree on a list of reforms by April 21-22 and ministers approve it when they meet in Riga, Athens might win some liquidity support from the ECB through an increased limit on short-term Treasury bill issuance.

Greece hopes a political deal could also help it receive 1.9 billion euros in profits that the ECB has made on purchases of Greek bonds in past years.

But for any new euro zone or IMF lending to occur, officials said Athens would first have to put the agreed reforms into law in parliament, because the government's credibility was now so low that no one would act just on its promises. (Reporting By Jan Strupczewski; Editing by Paul Taylor)

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Greek unemployment eases to 25.7 pct in January

ATHENS, April 9 (Reuters) - Greece's jobless rate eased to 25.7 percent in January from a downwardly revised 25.9 percent rate in the previous month, statistics agency ELSTAT said on Thursday.

January's reading, based on seasonally adjusted data, is the lowest since October 2014 when unemployment stood at 25.9 percent. The jobless rate hit a record high of 28 percent in September 2013.

Unemployment has come down from record highs as the economy stabilised last year after a severe slump, but remains more than double the euro zone's average of 11.3 percent in February.

Greece's economy grew by 0.7 percent last year, with recovery expected to gain traction this year. (Reporting by George Georgiopoulos; Editing by Karolina Tagaris)

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EMERGING MARKETS-Rouble hits 2015 high as Ukraine crisis seen easing

* Rouble hits new high for 2015 on Ukraine hopes

* Emerging and Asian shares reach six-month records

* Mainland demand lifts Hong Kong shares to seven-year peak

By Chris Vellacott

LONDON, April 9 (Reuters) - The rouble surged on Thursday to new 2015 highs on abiding hopes it would rally further as concern over the Ukraine crisis eased.

The currency rose more than 2 percent against the dollar and euro, its fourth consecutive day of gains. Oil recouped 2 percent of Wednesday's 6-percent slump.

"The rouble seems to have decoupled completely from oil prices which is something that normally doesn't last for long," Danske's chief emerging market analyst, Lars Christensen, said.

"We would expect to see the rally start to fade relatively soon but it seems sentiment is quite strong. The explanation is probably flow-driven rather than driven by underlying fundamentals, though oil prices have stabilised a little bit."

Emerging equities also rallied, with the MSCI emerging stocks index rising 0.7 percent to touch new six-month highs as investors put aside worries that plans by the U.S. Federal Reserve to raise rates would undermine emerging assets.

Asian stocks were also stronger, extending the previous day's gains to rise 0.7 percent

Hong Kong shares surged 2.7 percent, touching a seven-year peak, fuelled by money inflows from mainland Chinese investors buying cheaper shares after a 60-percent rally in Shanghai in the past five months. The Shanghai Composite Index was 1 percent weaker on Thursday, however.

Mumbai shares were 0.3 percent higher while the rupee was flat against the dollar after Moody's revised India's sovereign rating outlook to "positive" from "stable", citing a healthy economic growth outlook.

Ukraine sovereign dollar bonds rose up to 1.75 cents in price after a creditor group said it was working on a proposal that would allow Ukraine to resolve its debt problems without cutting the bonds' principal.

Turkey's lira inched higher against the dollar one day after the government mandated Deutsche Bank, Goldman Sachs and HSBC for a dollar-denominated eurobond issue maturing in 2026 for which bankers said initial price guidance was 265 basis points over U.S. Treasuries.

For GRAPHIC on emerging market FX performance 2015, see link.reuters.com/jus35t

For GRAPHIC on MSCI emerging index performance 2015, see link.reuters.com/weh36s

For GRAPHIC on MSCI emerging Europe performance 2015, see link.reuters.com/jun28s

For GRAPHIC on MSCI frontier index performance 2015, see link.reuters.com/zyh97s

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see ) (Editing by Louise Ireland)

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UPDATE 1-Greece raises 1.1 bln euros, sells all 6-month T-bills on offer

* Six-month T-bills priced to yield 2.97 pct, unchanged from March

* Athens must roll over another 1 bln euros on April 15 (Adds background, details)

By George Georgiopoulos and Lefteris Papadimas

ATHENS, April 8 (Reuters) - Greece raised 1.138 billion euros ($1.24 billion) at an auction of six-month Treasury bills on Wednesday, moving the full amount on offer in the first of two sales this month as it tries to roll over debt and navigate its way through a cash crunch.

Despite Athens' increasingly dire financial position, it was able to find domestic buyers to plug a gap of about 350 million euros stemming from foreign investors' refusal to roll over their own Greek T-bill holdings.

The T-bills were sold at a yield of 2.97 percent, however, unchanged from a previous sale in March and the highest rate in 11 months. Athens is now paying to borrow for six months almost twice what Portugal pays to borrow for 10 years.

Deputy Finance Minister Dimitris Mardas put a brave face on the situation.

"It was a successful issue," he told Reuters. "Domestic investors covered the whole issue, including the share held by foreign investors."

The sale's bid-cover ratio was 1.30, unchanged from March, showing no deterioration in demand despite tight liquidity conditions.

The amount raised included 263 million euros in non-competitive bids. The settlement date for Wednesday's auction will be April 14.

Shut out of debt markets and with aid from official creditors frozen, Greece has scrambled to cope with April redemption payments including 2.4 billion euros of maturing T-bills and a 450 million euro outlay to the International Monetary Fund due on Thursday.

T-bills are the only source of commercial borrowing for the country's leftist-led coalition government which has already hit a 15 billion euro cap on such issues set by its EU/IMF lenders.

The European Central Bank has turned down Greece's appeals to raise the limit on short-term debt issuance on grounds that the EU treaty bars monetary financing of governments.

Greek banks - the main buyers in auctions - have been told by the ECB they cannot add to their holdings of Greek government debt to plug any gap resulting from foreign investors fleeing the sales.

Athens faces another refinancing test on April 15, when 1 billion euros of three-month paper matures. (1 US dollar = 0.9209 euro) (Editing by Deepa Babington and Hugh Lawson)

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Estonia's new ruling coalition agrees tax cuts, more welfare payouts

TALLINN, April 8 (Reuters) - Estonia's new three-party coalition has agreed to cut income tax, raise the tax-free threshold on wages and increase child support benefits after weeks of talks over issues including fiscal policy and the allocation of ministrial portfolios.

Income tax will be cut to 32 percent from 33 percent and the tax-free threshold on salaries will rise to 205 euros per month from 154 euros. Fines for tax avoidance will be increased.

The finance ministry said in its last economic forecast in September that it was aiming for a public sector budget surplus of 0.2 percent of gross domestic product in 2015.

The Reform Party of Prime Minister Taavi Roivas, the Social Democrats, and the Union of Pro Patria and Res Publica (IRL) won 59 seats of 101 parliament seats in the March 1 elections.

The new government said the Reform party will keep the posts of prime minister and foreign minister, the finance minister would come from the IRL and the defence minister portfolio remained with the Social Democrats.

The government is expected to take the oath of office before parliament on Thursday. (Reporting by David Mardiste; Editing by Louise Ireland)

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RPT-After winning runoff election, Chicago Mayor Emanuel faces tougher road

(Repeats with no changes)

By Mary Wisniewski

CHICAGO, April 8 (Reuters) - Chicago Mayor Rahm Emanuel tried to show a softer side during his successful battle against challenger Jesus "Chuy" Garcia, but political observers doubt his sometimes abrasive style will change much as he struggles with the city's mounting fiscal problems.

Emanuel, former aide to President Barack Obama, won re-election on Tuesday in the city's first-ever mayoral runoff. He spent millions of dollars on re-election, some of it to rehabilitate an image for a hard-edged, top-down style.

After Emanuel failed to get more than 50 percent of the vote in the Feb. 24 first round of voting, he appeared in TV ads in a sweater, instead of his usual business suit, and admitted he sometimes rubs people the wrong way.

Now observers of Chicago politics are wondering how much Emanuel - who said Tuesday he will be a better mayor because of the election - can change.

"The mayor is who he is," said Paul Green, political science professor with Roosevelt University. "I think he's sincere when he says he'll listen more, but I don't think it will change much."

Political consultant Don Rose, a Garcia adviser, said Emanuel is both the "ultimate pragmatist" and the "ultimate egoist," so it is tough to say what lessons he will take from the election. One change Emanuel will need to make is his reputation as anti-union, Rose said.

Garcia had criticized Emanuel for closing 50 public schools, a high crime rate, and a perceived affinity for wealthy donors over the general public.

Emanuel argued he has made tough decisions for the nation's third-largest city. In his second term, Emanuel faces contract talks with a hostile teachers' union, a budget-cutting Republican Illinois governor and ballooning pension payments.

Chicago faces a deficit expected to grow to $1.2 billion next year, and Emanuel could call for more union concessions and possibly higher property taxes.

Early in his political career, Emanuel sent a pollster a dead fish, but challenges in the next term will force him to act with more finesse, said William Brandt, head of restructuring firm Development Specialists. "It's great to be the hard guy sending people dead fish in newspapers," said Brandt. "They're looking for a leader. Be a leader, not the hard guy."

Garcia supporter Kythzia Jurado, 40, expressed doubts.

"I think we'll see a softer Rahm at first but it remains to be seen what he does behind closed doors," Jurado said. (Reporting by Mary Wisniewski; Additional reporting by Tracy Rucinski and Megan Davies; Editing by Lisa Shumaker)

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UPDATE 1-Russian c.bank chief confident on inflation, banks, rouble

(Adds Nabiullina quotes and context)

MOSCOW, April 7 (Reuters) - Russian central bank governor Elvira Nabiullina said on Tuesday she expected a rapid decline in inflation, and that the banking sector was strong enough to weather financial difficulties.

"The acceleration of inflation... has in our view a temporary character. We expect quite a rapid fall in inflation if there are no new unforeseen circumstances," she told a banking conference in Moscow.

Inflation hit a 13-year high of 16.9 percent in March, following a rapid decline in the rouble late last year, but in recent weeks inflation has shown signs of stabilising as the rouble strengthens.

Nabiullina said the central bank would continue cutting interest rates insofar as inflation risks receded. The bank has already cut rates twice this year.

She also expressed confidence that the country's banks could weather the financial crisis, although rising bad loans represented a risk.

"On the whole we judge the situation in the banking sector as stable," she said. "The banking sector maintains a substantial capital buffer and the banking sector is able to counter serious shocks even if crisis phenomena deepen."

She said central bank stress tests showed that even if the oil price were to fall to $40 per barrel the sector would maintain capital levels above the regulatory minimum.

Nabiullina also said the factors which had been weighing on the rouble had now passed, saying that repayments of foreign debts could be financed without this having a significant effect on the rouble's value.

"Thus the influence of those factors which were influencing the exchange rate and inflation last year are gradually receding to nothing," she said. (Reporting by Elena Fabrichnaya and Oksana Kobzeva, writing by Jason Bush, editing by Timothy Heritage)

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EMERGING MARKETS-Emerging markets held in check as dollar resumes climb

LONDON, April 7 (Reuters) - Emerging market stocks paused on Tuesday as the dollar resumed its climb, shrugging off last week's disappointing jobs data in the United States, though gains in Asia helped equities cling to four-month highs.

The MSCI emerging stocks benchmark index was flat, while the MSCI Asia Pacific excluding Japan index traded 0.3 percent higher after a 2.5 percent rise in Shanghai shares.

Emerging market assets got a boost from a tepid US jobs report on Friday, which fuelled expectations of measured interest rate rises by the U.S. Federal Reserve, making dollar assets less attractive.

However, the dollar index, which tracks the greenback against a basket of other currencies, resumed its climb on Tuesday, to trade 0.4 percent higher. Analysts said the dollar's bounce could be limited, though.

"We are seeing some retracement from dollar weakness. The U.S. jobs data was not horrible ... but it is not going to be easy from here for the dollar to keep going higher and higher against high-yield currencies such as lira," said Luis Costa, a senior emerging market debt and foreign exchange strategist at Citi.

"I think the traction in bearish emerging market trades is a bit more controlled now."

Turkey's lira was 0.5 percent weaker against the dollar, pressured by the rising dollar and worries about political instability after far-left militants took a prosecutor hostage last week. He later died in a shoot-out between police and the militants.

Moscow stocks were lower, with the dollar-denominated RTS index falling 1 percent and its rouble-based counterpart, the MICEX down 0.6 percent.

The rouble also gave up earlier gains stemming from a recovering oil market, retreating from a 2015 high to fall 0.15 percent against the dollar.

In Ukraine, dollar bonds of state-run Oschadbank and Ukreximbank rose sharply after the government hinted they could be treated more leniently in an ongoing debt restructuring.

On Saturday, Kiev approved a framework for Ukraine's debt restructuring, through which it aims to generate $15.3 billion.

Elsewhere, the Czech Republic was close to becoming the first country in the world without a quantitative easing programme to see negative bond yields as the return on its benchmark two-year bond traded close to zero.

Key Asian currencies were weaker with the Indian rupee at a one-week low after the central bank opted to keep rates unchanged, triggering outflows from bonds and stocks.

For GRAPHIC on emerging market FX performance 2015, see link.reuters.com/jus35t

For GRAPHIC on MSCI emerging index performance 2015, see link.reuters.com/weh36s

For GRAPHIC on MSCI emerging Europe performance 2015, see link.reuters.com/jun28s

For GRAPHIC on MSCI frontier index performance 2015, see link.reuters.com/zyh97s

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see ) (Additional reporting by Sujata Rao; Editing by Larry King)

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Sberbank head says not willing to restructure loan to Rusal

MOSCOW, April 7 (Reuters) - The head of Russia's top lender Sberbank, German Gref, said on Tuesday the bank was not willing to restructure a loan to aluminium producer Rusal.

"There is nothing new. There has been no proposal that is acceptable to us," Gref told reporters.

Rusal, the world's largest aluminium producer, has long hoped to reach agreement with lenders to revise the terms of its multi-billion dollar debt. (Reporting by Alexander Winning, writing by Elizabeth Piper, editing by Vladimir Soldatkin)

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Greek finance minister wants initial deal with lenders at April 24 Eurogroup meeting - paper

ATHENS, April 6 (Reuters) - Greek Finance Minister Yanis Varoufakis wants the negotiations with the country's official lenders to reach a preliminary deal at an April 24 meeting of euro zone finance ministers, he told Greek daily Naftemporiki on Monday.

"At the Eurogroup (meeting) of April 24 there must be a preliminary conclusion (of the talks), as per the Eurogroup accord on Feb. 20," Varoufakis told the paper.

Greece offered a new package of reforms last week in the hope of unlocking remaining bailout funds, but has yet to win agreement on the proposals with its EU and IMF lenders. (Reporting by George Georgiopoulos; Editing by Pravin Char)

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GLOBAL MARKETS-Asia up after dismal U.S. jobs data, dollar pressured

* Weak U.S. payrolls near-team stifle Fed hike bets

* Greenback pressured as Treasury yields drop after jobs data

* Oil rises after Saudi Arabia raises prices to Asia

* Major European markets closed for Easter Monday

By Lisa Twaronite

TOKYO, April 6 (Reuters) - Asian shares rose and the dollar steadied but remained under pressure on Monday, after a dismal U.S. jobs report led investors to pare bets the U.S. Federal Reserve would hike interest rates anytime soon.

Major European markets were closed from Friday to Monday for the Easter holiday, reopening on Tuesday.

Labor Department data showed U.S. employers added the fewest jobs in more than a year in March. The rise of 126,000 jobs was well below expectations for a gain of 245,000 forecast by a Reuters poll of economists.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.7 percent to push to its highest levels since September 2014. Japan's Nikkei stock average slumped 0.3 percent, though it pared earlier sharp losses as the yen gave up gains against the dollar.

U.S. stock markets were closed on Friday for the Easter holiday, but U.S. stock futures fell after the jobs data, suggesting a lower open on Wall Street later on Monday. U.S. S&P e-mini equity futures were thinly traded in Asian time, and were down 0.7 percent after shedding 1 percent on Friday.

The yield on benchmark 10-year Treasury notes < US10YT=RR>, which moves inversely to prices, hit nearly two-month lows of 1.8 percent on Friday, and stood at 1.829 percent in Asian trading, keeping pressure on the greenback.

"The dollar will likely remain pressured for some time on easing expectations for the Federal Reserve's rate hike in June," said Park Yu-na, an analyst at Dongbu Securities, after the South Korean won climbed to a two-month high against the U.S. currency.

The dollar index, which tracks the U.S. currency against a basket of six major rivals, edged up 0.2 percent to 96.727 .

Data from the Commodity Futures Trading Commission released on Friday showed that investors reduced their upside bets on the U.S. dollar in the latest week ended March 31, while net shorts on the euro hit another record high.

The euro climbed about 0.1 percent on the day to $1.0981 , moving well away from a 12-year trough of $1.0457 plumbed on March 16. The euro suffered the worst quarter in its 15-year history, shedding 11 percent against the dollar on divergent monetary policy expectations between the Fed and the European Central Bank, as well as investors' fears about Greece's finances.

Against its Japanese counterpart, the dollar edged up about 0.1 percent on the day to 119.05 yen.

"We still see the dollar trending higher in the longer term. The jobs data headline was certainly soft, but we have to consider that jobs had been roughly growing at a pace of 200,000 a month for a year. The rise in earnings was also a plus," said Kyosuke Suzuki, director of forex at Societe Generale in Tokyo.

"Indicators like housing-related data, consumer confidence and initial jobless claims paint a brighter picture and the April non-farm payrolls could give an upside surprise. It helps explain why dollar reaction is confined to a 1-yen range so far," he said.

The Australian dollar inched down 0.1 percent to $0.7626 , moving back toward Thursday's six-year trough of $0.7534 amid expectations for an interest rate cut by the Reserve Bank of Australia later this week.

Crude oil futures rallied after Saudi Arabia raised prices for sales to Asia, taking back some of their sharp losses marked before the holiday weekend after Thursday's preliminary pact between Iran and global powers on Tehran's nuclear program. [O/R}

Brent added 1.3 percent to $55.65 a barrel, while U.S. crude futures rose 1.8 percent to $50.02 a barrel, as investors bet that Iran's framework deal offered little chance for any significant increase in exports until 2016.

Spot gold rose 0.6 percent at $1,217.06 an ounce, lifted by the downbeat U.S. jobs report. (Additional reporting by Yeawon Choi in Seoul and Shinichi Saoshiro in Tokyo; Editing by Eric Meijer)

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