GLOBAL MARKETS-European shares, euro rebound from steep losses
* European shares rebound after sharp losses
* Euro edges higher
* Growth forecasts, ECB repayments, Italy in focus
LONDON, Feb 22 (Reuters) - European shares and the euro on bounced off their previous session's steep falls early on Friday despite unease over European economic forecasts, ECB crisis loan repayment data and Italian elections at the weekend.
The German Ifo business climate indicator for February rose to 107.4 from 104.2, helping to lift the mood after Thursday's disappointing PMI data rattled markets.
It will be followed by new European Commission economic forecasts at 1000 GMT which should show whether there are any signs of recovery outside of Germany. They will also show how far off-track the likes of Spain, France and Portugal are from meeting their deficit targets this year.
European shares on the FTSEurofirst 300 rose 0.7 percent to recoup some of Thursday's 1.5 percent slump, albeit remaining on course for a third weekly loss in four.
London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX were up 0.7, 1.1 and 0.6 percent respectively, helping lift MSCI's world share index 0.2 percent as markets recovered from 2013 lows.
"The markets took a heavy dive earlier this week, but they're showing signs of a partial recovery," said Berkeley Futures associate director Richard Griffiths.
"The fact that traders are still buying on the dips shows that they're hoping that the global economic recovery will continue, although it will take time."
In the currency market, the euro extended gains after the German data, climbing 0.3 percent to just above $1.32 following its one percent drop this week.
The dollar was broadly lower, as weak data helped dampen talk of the Federal Reserve winding down its support after its minutes this week showed a minority of its members were questioning the impact of its measures.
Other than the economy, the focus will be on the weekend election in Italy. There is raft of Italian data due out including inflation and consumer confidence numbers for January.
The European Central Bank will also publish details at around 1100 GMT on how much banks plan to repay of its second batch of crisis loans when they get the first chance to return the money next week.
German Bund futures hovered around four-week highs in early trading at 143.40. Italian elections run the risk of producing a fragmented parliament which could hamper the future government's reform efforts. Bunds are seen holding firm at least until the results come out.
"(The) extension of (the) risk averse environment depends on key event risk, particularly (this) weekend's Italian elections," Credit Agricole said in a note.