European crisis at "critical stage" says IMF

1550: The Brawl for it all

... Markets are heading a bit softer into the close but now that the mini-Rome summit is through the eyes of Europe will switch to Warsaw as the matchup Shakespeare himself would have refused to script is just hours from kick-off: Gemany versus Greece. Enough said.

Have a great weekend everyone.

1525 BST: More from Rome

Francois Hollande says he wants to work as "quickly as possible" to introduce a Europe-wide financial transaction tax. Sweden as said today it's got problems with the idea, as does Switzerland and, of course, the United Kingdom. Leaders *may* decide to engender some solidarity by going after UK Prime Minister David Cameron together on this topic in the hope that his isolation distracts from the core's inability to agree and/or galvanizes the whole of the Eurozone to push harder for growth-friendly reforms.

1515 BST: Growth pact?

European leaders are trying to spin this Rome agreement as a new agreement for growth - but the figures have been floated in the past (project bonds, new EIB lending for infrastructure projects, etc). In any event, it needs to be taken to next week's Leaders' Summit for the full whack.

1500 BST: Same Hymn sheet?

Anglea Merkel's "austerity and growth are two sides of the same coin" mantra gets a bit of a kicking after today's four-way meeting in Rome hosted by Italy's Prime Minister Mario Monti and including Merkel, Francois Hollande and Mariano Rajoy.

He says the group wants to see a €130bn growth package (1 percent of Euro GDP) to counter the "insufficient stability" delivered so far by budget discipline alone.

In an ironic twist, the headlines from Rome come exactly the same time as those from Berlin, where the German government confirms plans to lower net new borrowing targets for both 2013 and 2014 while maintaining a pledge to meeting budget deficit rules three years earlier than legally mandated.

1445 BST: Spain confirms bailout request date

Spain's Economy Minister Luis de Gunidos says country's formal request for bank aid will be made Monday 25 June and MoU for aid conditions will be ready by 9 July. Unfortunately, 25 June petition will not include exact amounts of aid, which won't be known until the 9 July MoU is published.

1430 BST: North American open

Dow opens up 0.36 percent, or 45.64 points, to 12,619.21 at the bell. S&P 500 adds 4.65 points, or 0.35 percent. Nasdaq pops 12.81 points, or 0.45 percent, to 2,871.9.

Toronto Stock Exchange up 63.42 points to 11,471.74.

1420 BST: Bund futures fall

As US stock futures improve: the September Bund is now at a session-low 140.789, down 73 ticks on the day. US stock futures are pointing to a modest turnaround from yesterday's 2.2 percent decline for the S&P 500, the worst single-day performance so far this year.

1410 BST: ECB changes collateral rules

.... but so far only for asset-backed securities such as bonds linked to residential and commercial mortgages. The weaker-rated ABS bonds will be subject to a 32 percent "haircut" in par value when used by a financial firm as collateral with an European Central Bank loan. The haircuts scale down to 26 percent for bonds back by loans to small and medium-sized companies and 16 percent for more highly rated bonds backed by commercial mortgages.

Meanwhile, the Canadian ratings firm DBRS says it will make a decision on is A rating for Spain's government bonds by late August. At present, the DBRS rating has allowed Spanish government bonds to avoid a 5 percent haircut when used with the ECB.

1300 BST: Greek Prime Minister hospitalised

Greece's new prime minister, Antonis Samaras, has been taken to hospital after suffering from a detached retina. The PM's office says he will have surgery tomorrow. The reports first surfaced in the Greek news website In.Gr.

1050 BST: One down

Slovakia's parliament has ratified the eurozone's permanent bailout facility, the $500bn European Stability Mechanism, this morning. The ESM is intended to take the place of the $440bn European Financial Stability Fund on 9 July, but issues in Germany are making that much more unlikely.

Germany's federal constitutional court has asked President Joachim Gauck to hold off granting German permission for participation in both the ESM and the region's fiscal pact until several legal challenges to both of them have been exhausted.

0935 BST: Italy now the focus?

It's hard to keep a bond trader's attention at the best of times (they're notoriously over-focused on the murals of screens they sit in front of for hours each day) but now that they've been satisifed with at least "some" detail on Spain's potential bailout, they've shifted their concerns east to Italy.

Prime Minister Mario Monti will host a four-way pow-wow with Angela Merkel, Francois Hollande and Mariano Rajoy later today as the "mini Euro" group gets its facts straight ahead of next week's Leaders' Summit.

Italy's funding situation might actually be more troubling than Spain's (which has now essentially a "net neutral" borrowing schedule for the remainder of the year).

Italy's benchmark 10-year bonds have risen 13 basis points this morning to 5.89 percent while credit default swaps are 10 basis points dearer at 518 basis points.

0925 BST: Weaker stocks, oil

European shares are read across the board, with the FTSE Eurofirst 300 down around 0.7 percent to 1,001.90.

The presumed global slowdown in the world's biggest economies is having a huge impact on oil prices, as well, with the benchmark NYMEX Light Sweet Crude price down around 21 percent in the past six months, trading firmly under $80 a barrel at $79.21. Brent crude is also off significantly for the first half of the year, with the 14 percent decline taking it under $90 a barrel on international markets ($89.58).

0915 BST: "Doesn't sound credible to me ..."

Alistair Newton of Nomura's reply on Bloomberg TV to the €62bn "worst case" scenario capital need for Spain's banks as assessed by Oliver Wyman. "... many even aruge that €100bn isn't going to be enough".

0900 BST: German confidence declines

The Ifo Institute's business climate institute for June fell to 105.3 from a revised 113.2 in May. The current conditions portion of the survey came in higher than expected, however, at 113.9 (analysts were looking for 112.3).

Expectations were pegged at 97.3 from a revised 100.8 in May.

0855 BST: BRIC to BoE?

Jim O'Neil, the chairman of Goldman Sachs Asset Management and the man who first coined the phrase "BRIC" to represent the largest emerging market economies when he was the investment bank's chief economist, told Bloomberg TV Friday that he would "think about" accepting the role of new Bank of England Governor if he was asked.

In April, several media reports, led by the Sunday Times, suggested O'Neil was one of the short-listed candidates that Chancellor George Osborne was considering as a replacement for the departing Mervyn King.

0820 BST: Normal service resumed

Foreign exchange markets are reacting in a consistent fashion this morning with the US dollar index, a measure of the greenback against a basket of over currencies, is trading at a one-week high of 82.437. The Euro is at a session low $1.2542 against the dollar.

In the bond markets, September Bund futures are up 41 ticks to a session high 141.73.

0815 BST: Spanish reaction

Spain's IBEX is holding up well given the newsflow: the benchmark IBEX is down 1.1 percent, largely in-line with the other major European indices.

Last night's release of two private reports on the capital needs of the nation's banking system indicate as much €62bn may be needed in order to steady the ship. However, the figure is already being derided as too low, given that the study did not factor in the impact of losses on government bonds. Consultants Oliver Wyman and Roland Berger stressed the banks' balance sheets with assumptive declines of 6.5 percent for Spanish GDP over three years and a 60 percent drop in housing prices from their peak.

Spanish 10-year government bond yields are quoted at 6.65 percent on the electronic exchange Tradeweb.

0805 BST: Pullback to begin

European markets are lower at the open as anticipated, but mixed reaction thus far for banking stocks affected by the Moody's downgrade. The FTSE 100 is down 0.9 percent and the DAX 1.1 percent but we're seeing 2.8 percent and 2.5 percent declines for RBS and Barclays.

Credit Suisse is down around 1.7 percent, BNP Paribas is down 1.4 percent and Credit Agricole is off 1.85 percent.

0750 BST: Good Morning

Stocks in Asia fell hard as global investors reacted to the steepest decline of the year for US stocks Thursday amid concerns of a co-ordinated slowdown in the world's largest economies. The broad MSCI Asia Pacific Index retreated 1.14 percent, erasing most of the gains for this week, after a 2.2 percent tumble yesterday for the S&P 500.

European stock futures and financial bookmakers point to a quick decline at the opening bell this morning, with declines of around 60 points predicted for both the FTSE 100 and the DAX.

Further pressure is expected on some bank shares this morning after a move last night my Moody's Investors Service to cut the ratings of 15 bank with global capital markets businesses, including Britain's HSBC, RBS and Barclays. BNP Paribas, Credit Agricole and Deutsche Bank were also included in the review, which was first announced on 15 February.

Eurogroup Finance Ministers concluded a one-day meeting in Luxembourg but made no specific pledges with respect to a bank-related bailout for Spain, which is expected to be finalised at next week's Leaders' Summit in Brussels. The IMF said in a report published Thursday that the crisis had reached a "critical stage".