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EMERGING markets governments are keen to contribute to increase the capital base of the International Monetary Fund to help rescue struggling states such as Greece. The leaders of the BRICS group of the largest emerging economies – Brazil, Russia, India, China, and South Africa – are in favour of adding to the IMF’s capital base even without changing the voting structure, a move the U.S. would block.

SLOVAKIA finally gave its approval to extend the powers of the Eurozone bailout fund yesterday, paving the way for a far reaching rescue plan to stem the debt crisis engulfing Europe. The vote cleared the final hurdle to overhauling the size and reach of the EFSF, but turns the focus back onto Eurozone leaders to set out how to bail out banks, states, or both.

BANKS worldwide came under fire from a zealous round of downgrades by credit rating agency Fitch yesterday, knocking share prices for the UK’s biggest lenders. Fitch cut the long term default rating of both RBS and Lloyds by one notch to A and put Barclays on a negative outlook to reflect the reduced chance of another bailout from the UK government.

MARKETS:

EUROPEAN shares are set to open higher today and remain on track for a third straight week of gains, with strong results from Google seen helping sentiment, while miners are likely to track firmer metal prices.

HONG KONG and Shanghai shares fell this morning as investors took money off the table following a rally in banks and property counters this week, after China inflation data showed the price pressure, while easing slightly, remained high. Data released today showed China’s annual consumer inflation easing to 6.1% in September although stubborn food prices showed Beijing’s fight against inflation is not over.

CURRENCIES:

THE EURO held a decline from yesterday against the yen after Spain’s credit rating was cut by Standard and Poor’s, stoking concern Europe’s debt crisis will spread. The dollar and yen gained against most major peers as investors sought the safest assets. Singapore’s dollar rose after the nation’s central bank didn’t ease policy as much as some analysts expected.

ENERGY:

CHINA has taken on General Electric Co. and Western peers that control the $70 billion wind turbine market, striving to repeat its 2010 coup when the Asian nation sold more than half the world’s solar panels for the first time. Armed with at least $15.5 billion in state backed credit China’s biggest windmill makers won their first major foreign orders in the past year including their first one in the U.S.

COMMODITIES:

GOLD’S biggest slump in three years means traders and analysts are now the most bullish in three months, speculating that Europe’s debt crisis, slowing growth, and a bear market in equities will drive demand for bullion. Gold slumped as much as 20% since reaching a record on September the 6th as investors sold the metal to cover losses in other markets.

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