German Ifo surveys and UK retail sales the focus this morning

• Fed takes more cautious approach on rates and retains "considerable time" pledge;\\

• German Ifo surveys and UK retail sales the focus this morning;

• Lots of US data to come later including jobless claims and PMI readings.

Investors were given a small boost overnight which is driving index futures higher ahead of the open as the Fed spoke of its confidence in the US economic recovery, while taking a slightly smaller step towards warning on imminent rate hikes in 2015. The FOMC opted not to remove its pledge to keep rates low for a "considerable" time, instead adding a sentence that stated it can be "patient in beginning to normalise the stance of monetary policy" as well as a number of caveats that effectively gave it the freedom to alter its position at any point while technically remaining transparent.

It would appear that the Fed is going to be far more gradual in its approach to raising rates while remaining as transparent as possible with investors so as to avoid any unnecessary shocks in the market. The unprecedented nature of the Fed's exit strategy - with it attempting to return to normalisation following the greatest stimulus program in its history in which it raised its balance sheet to more than $4.5 trillion - means it needs to tread extremely carefully as it simply doesn't know what the consequences could be if it doesn't. The markets can become extremely volatile very quickly at which point panic will usually set in and this is something the Fed desperately wants to avoid.

I do wonder if the Fed's decision to take such a small and mindful step at this meeting has anything to do with the excessive amounts of volatility already seen in certain markets already this week. Maybe the Fed decided that given how trigger happy investors became following the rouble sell-off, it would be sensible not to risk further panic in the markets by removing its pledge altogether and risk sending the wrong message. Clearly the Fed is saying that the middle of next year remains the target but there are a number of things that could change this and just removing its pledge may suggest that the first rate hike will come sooner than expected, something the market were unlikely to be too pleased with.

While the biggest event of the week may now have passed without too many problems, there's still a lot to come starting today with a number of key economic releases. From Germany we'll get the latest Ifo readings of business climate, current assessment and expectations, all of which are expected to have improved slightly in December. The survey tends to be quite respected by the markets due to its larger sample and therefore can have a significant impact on the markets. Given the much better manufacturing PMI and ZEW surveys earlier in the week, I think we could see a much better improvement in the business climate reading for December, which hopefully bodes well for the new year.

In the UK the consumer is under the spotlight with retail sales figures for November being released. The consumer is so important to the UK economy and these figures could provide insight into what the consumer trends will be as we enter the hugely important holiday season. Holiday spending seems to start earlier and earlier nowadays as retailers bring forward sales more and more in an effort to entice customers into their stores. Expectations are for only a small rise in sales of 0.3% last month following a strong showing the month before. This markets a dramatic improvement on the year earlier period though so I don't think it's anything to be too disappointed with, especially at a time when wage growth remains subdued.

There's plenty more data to come from the US later including weekly jobless claims, December services and composite PMI readings, CB leading indicator and the Philly Fed manufacturing index. With all this to come, I think we have a few more days of market volatility to come before we enter the quieter holiday period.

The FTSE is expected to open 46 points higher, the CAC 35 points higher and the DAX 88 points higher.