It's not often we see a 'bet the company' type of deal, but yesterday we got one with the surprise move by Super Retail Group to buy top sports retailer Rebel Group for $610 million from private equity firm Archer Capital.

The deal came as something of a shock to the market, given the uncertainty in financial markets, especially equities.

The volatility and the sluggish level of growth in much of retailing had seen Archer abandon plans to float Rebel Sports and its 128 stores across Australia last year and then defer the IPO indefinitely this year.

Super Retail has been a successful retailer of auto care products through its SuperCheap Auto chain and recreational products through two chains, Ray's Outdoors and BCF (Boating, Camping and Fishing).

So on the face of it there is some logic to the Supercheap buy from a diversification point of view and from buying an asset what a private equity group doesn't want to keep.

Super Retail thinks it's a great deal and says the acquisition would boost earnings per share in the current fiscal year and was a strong strategic fit.

But then it has to because the company is planning to pay for the purchase through a 9 for 19 rights offering at $5.34 a share to raise $334 million of the $610 million cost. The rest will be paid for by debt.

Yesterday's statement said Rebel Sports, with a 24% market share, had sales of $603 million and earnings before interest tax and depreciation of $77 million in the current financial

Rio Tinto's costly and overpriced 2007 takeover of Alcan for more than $44 billion continues to haunt the group.

The deal crippled Rio, nearly bringing it to its knees in the GFC as it was forced to raise cash at a big discount from shareholders and sell equity to Chinese interests.

The Chinese iron ore boom saved it and last week the company reported record production from the huge mines it owns in WA.

But yesterday it revealed the results of a review of its aluminium business and said it will sell 13 underperforming business units worldwide, including refineries and smelters in Australia.

Rio said in a statement the moves were part of a streamlining its aluminium group following the strategic review, but did not currently involve any job redundancies.

The company didn't give any values for the assets involved, sales or profitability (or losses).

But analysts said the 13 businesses could be valued at $US8 billion and account for 20% of the company's aluminium division.

Rio has already sold assets from the division on the manufacturing side.

Analysts also said that of the $US8 billion total, the assets in Australia and NZ to be sold (and to be called Pacific Aluminium), could be worth $US6.5 billion and would likely be listed on the stockmarket in the next couple of years.

Rio also didn't give any idea of timing of the sales except to say that they might not happen for a while.

But it is clear it is getting rid of the dregs of the Alcan business, leaving it with Alcan's high quality Canadian assets and those of the old Comalco in Queensland, especially at Weipa and Gladstone.

Rio shares rose $1.65, or 2.35%, to $69.95. The shares eased in afternoon trading.

The world steel industry remains confident that this year and next will see solid growth in steel use, despite forecasts of slowing economic growth in major economies from groups like the IMF and OECD.

And there was one reason for the continuing confidence from Big Steel, China and other still growing economies in Asia are expected to maintain their current high levels of consumption of steel.

It means that the billions of dollars mining companies led by BHP Billiton, Rio Tinto, as well as Fortescue are spending expanding their iron ore and coking coal businesses in WA, South Australia, Qld and NW are not being wasted.

The World Steel Association (worldsteel) overnight released its October 2011 Short Range Outlook for 2011 and 2012 and says growth in use will slow next year, but not by as much as some forecasters have suggested.

Worldsteel forecasts that apparent steel use will increase by 6.5% to 1,398 million metric tonnes (mmt) this year and by a further 5.4%  in 2012 to more than 1.46 billion tonnes.

So by the end of next year world steel use could be up 150 million tonnes from 2010's level, with more than 70% of that increase occurring in emerging and developing economies, led by China, India and Brazil.

Those forecasts follow the upgraded 15.1% jump in apparent steel use in 2010.

In April, the World Steel Association released its first short term forecast for 2011 and saw an increase of  5.9% to 1,359 mmt this year and 6% next year to 1.441 million tonnes.

Interestingly in its April forecast, the Association said 2010 had seen a rise of 13.2%, but the latest forecast has boosted that to 15.1% following more analysis.

In other words, 2010 was far better than previously reported and as a result the forecast for 2011 and 2012 will actually be bigger than estimated back in April because of the rise in 2010's consumption.

Worldsteel says the projections consider both real and apparent steel use. "Apparent steel use reflects the deliveries of steel to the marketplace from the domestic steel producers as well as from importers. This differs from real steel use, which takes into account steel delivered to or drawn from inventories," the Association explained.

And the main driver will of course be China, helped by solid increases forecast for the likes of India.

The Association said China’s apparent steel use in 2011 is expected to increase by 7.5% to 643.2 mmt following 8.5% growth in 2010.

In 2012, Chinese steel demand is expected to rise 6%, which will bring its apparent steel use to 681.6 mmt.

The Association said the new estimates could be described as "cautiously optimistic" because of the continuing problems in the eurozone economies and the sluggish level of activity

Is the long tipped hard landing for China’s economy about to happen?

Questions are being asked if China's economic slowdown is starting to crunch sections of the economy, just as the trade surplus weakens as export growth fades.

At the start of this week, big banks were supported,yesterday it was small business which was extended a rather generous helping hand as the government tried to put a lid on a growing financial problem spreading through small businesses from the city of Wenzhou in Zhejiang province.

A story posted on the official website Xinhua yesterday revealed that the government has ordered the country's banks to support financially strapped small and micro businesses.

It also came hours before the September trade figures were released, which showed a surprising slowing in exports and a smaller than expected surplus (see story below).

It is has been a dramatic change of approach from the government.

On Monday Central Huijin Investments, the domestic arm of the country's sovereign wealth fund, announced that it had bought shares in the country's four biggest banks, a move that sparked a rally in bank shares and stopped a downturn in share prices in Hong Kong and Shanghai.

It was the first such announcement for three years (the last time was in the GFC and was made to steady the market then as well).

Now a well publicised move to help struggling small businesses has happened.

Clearly the credit crunch engineered by multiple increases in asset reserve ratios and six interest rates is hurting.

So this week will be a lot like last week.

There will be a focus on what some central banks say and do, more Chinese economic data, along with key figures in the US, plus American banks reporting third quarter results.

And, of course Europe, or rather a durable and doable solution to its debt problems, both sovereign and banking.

The G20 finance ministers' meeting in Paris at the weekend has set next Sunday as the deadline for Europe to have sorted out a plan to resolve the debt crisis.

So there will be a lot of publicity this week about the plan's development, as well as opposition.

And a report is due later in the week on the latest review of the bailout that seems to be working, the 85 billion euro package for Ireland.

Financial markets had a very solid week last week, especially on Friday in Europe and the US as the belief in a eurozone solution grew.

AMP Capital Investors' chief economist Dr Shane Oliver says:

"The noises out of Europe have remained positive with the Troika (i.e. the IMF, ECB, and EU) appearing to clear the way for the payment of the sixth tranche of bailout funds for Greece, all countries now ratifying the July 21 enhancement of the EFSF (taking it to 440bn euros) and Chancellor Merkel and President Sarkozy reaffirming plans to recapitalise banks and devise a more “durable” and “comprehensive” solution for Greece and Europe’s debt problems by the November 3 G20 leaders summit.

"The key elements of the plan under consideration appear to be a 30 to 60% write down of Greek debt, recapitalising banks to ensure they can withstand it and boosting the fire power of the EFSF to protect other countries such as Portugal, Italy and Spain (possibly via a partial guarantee for investors against bond losses)."

In China, after the trade and inflation data late last week, more economic activity data for month of September and the quarter.

Confidence is back, risk is 'on' again and markets almost blushed with vigour last week, none more than the Aussie dollar which added a large 5.9% or nearly 6 USc in jumping well past parity with the greenback.

Most of that coming in a surge on Friday here and offshore as the currency charged past $US1.03 on a day that also saw the euro finish its best week against the US dollar for months.

In fact on Friday the euro jumped 3.8% against the greenback, its best day since 2009, so rapid was the rise in confidence and demand.

And it was the Aussie dollar's second weekly advance after losing almost 10% of its value in August and September.

The reason is the confidence that the eurozone is getting on top of the sovereign debt and bank capital problems.

A sharp rise in retail sales last month in the US (up 1.1%) helped push the dollar lower, but the big reason was the continuing confidence that a solution would be found for the European crisis.

That rising belief (which is based on words, not deeds) drove markets forward.

Friday's weakness here and in parts of Asia (after some average Chinese economic figures Thursday and Friday) will be reversed when trading resumes today.

The MSCI All-Country World Index rose 1.4% on Friday, extending its weekly gain to a very sharp 5.5%.

Just seven days from today is all we have until we know whether the eurozone debt crisis will be put on a track towards settlement once and for all.

Despite last week's confidence rally on global markets, the European financial crisis isn't resolved and won't be until the end of the European Union leaders’ summit on October 23.

So we should be very wary of market moves in the coming week, especially a continuation of last week's rebound; it could all come to tears if the EU can't get its act together.

Last week's a near 4% jump in the value of the euro against the US dollar summed up the strangeness of last week's rally.

It was a rally based on speculative hope and nothing more.

Copper also jumped, despite rising fears about the Chinese economy.

But more data on the Chinese economy will test that confidence this week.

The week's trading was all a bit surreal ahead of Saturday's meeting of G20 finance ministers and the knowledge that it wouldn't announce anything dramatic.

The meeting issued a strong challenge to the EU to sort out the problem and come up with a believable plan by next Sunday.