In the US session Housing Starts and Building Permits figures were released. New-home construction in the U.S. rebounded in November, led by gains in single-family dwellings that signal the residential real estate industry will continue to support growth in the world’s largest economy. Housing starts climbed 10.5% to a 1.17 million annualized rate from a 1.06 million pace in October, figures from the Commerce Department showed Wednesday in Washington. Building permits, a sign of future construction, increased 11% in November to a 1.29 million annualized rate, the most since June. They were projected to rise to 1.15 million.

However, the focus of the session was on on Fed interest rate decision and the following statement. According to the Fed statement the Committee judges that there has been considerable improvement in labor market conditions this year, and it is reasonably confident that inflation will rise, over the medium term, to its 2 percent objective. Given the economic outlook, and recognizing the time it takes for policy actions to affect future economic outcomes, the Committee decided to raise the target range for the federal funds rate to 1/4 to 1/2 percent. The stance of monetary policy remains accommodative after this increase, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. In light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and expected progress toward its inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

Tomorrow's session will bring German Ifo Business Climate figures. Analysts are predicting incline to 109.2. In the US session Unemployment Claims, Philly Fed Manufacturing Index and Current Account figures are scheduled for a release. Unemployment Claims are expected to decrease to 271,000, while Philly Fed Manufacturing Index should increase slightly to 2.1. Current Account deficit should widen to $123 billion.

Figures to watch:

German Ifo Business Climate (Thursday 10:00)

Unemployment Claims (Thursday 14:30)

Philly Fed Manufacturing Index (Thursday 14:30)

Current Account (Thursday 14:30)