Last night saw a string of better-than-expected numbers lift confidence and encourage investors back into the market.

All the right ingredients were there. We saw some robust earnings coming out of several heavyweight European banks, and the manufacturing data out of the US held above expectations. In addition to that we saw the Aussie dollar hold above 91 US cents and the CBOE VIX Index fall to 22.

There were two fundamental thought processes going through the minds of traders overnight. The first was encouragement that earnings at BNP Paribas and HSBC might be representative of a healthier-than-expected European banking system. The second was relief over a US manufacturing sector - a sector that's not about to grind to a halt any time soon.

However, as usual, the good news came with a caveat. Federal Reserve chairman Ben Bernanke made it clear last night that the road to recovery would continue to be difficult and long. The reality is that the housing market is still on its knees, and too many Americans are out of work. You're just not going to see a patient who was still in intensive care last year go out for a sprint session - recovery is a long, slow process with gains and set-backs.

We're expecting broad-based gains this morning with money flowing into the banking, mining and energy sectors.

Today we get retail sales numbers and a decision on interest rates by the RBA. Rates are expected to remain on hold at 4.5 per cent.