FTSE 100: After testing first support for most of the week, the FTSE rebounded strongly yesterday gaping higher on the open and maintaining those gains. Currently with support still being held the third wave advance remains in place.

Today, key earning reports from Asia disappointed which has dented sentiment overnight in some of the Asian bourses leaving most indices heading for a weekly loss. This highlights the view taken in some quarters that too much good news has already been discounted. Overall though recent economic data from the US, Europe and the UK have demonstrated that the green shoots of recoveries are still in place. Indeed, looking at different houses forecasts for growth, this week we have seen a number of upgrades to US, European and Asia particularly China growth outlook for 2010. The upgrades are mainly based on the premise, that given the recovery signs seen within the key developed countries, export led growth is likely to rebound.

This view of economic recovery will be tested again in Europe with flash PMI due to be released today. The market is expecting solid gains within both the manufacturing and services sector. The only other key data release today is in the US with existing home sales for July. Given the recent housing data, today’s report should also demonstrate some solid gains and a potential contraction in unsold inventory.

Sources: Reuters: BBC: Bloomberg: Lawshare: Deutsche Bank (db): Proquote: Financial Times: Wall Street Journal: CLSA: Sharescope: Market News. Capital Economics: CNBC: Wikipedia:

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