The Week Ahead: Fed, BoE rate decisions; Micron results

The coming week will be dominated by central banks, with rate-setting meetings due to take place in Japan, the US and the UK, among others – see our events calendar, below, for a full list. The headline economic data release arguably comes on Monday in the form of US retail sales figures for February, closely followed by import and export prices on Tuesday. These numbers may take on added significance given rising trade tensions and tariff threats. If inflationary pressures in the US are to spread to the real economy and the rest of the world, they will first appear in US import and export data.

US Federal Reserve interest rate decision

Wednesday 19 March
The Federal Reserve is expected to hold the fed funds rate steady in its current range of 4.25% to 4.5%. Crucially, the meeting will allow policymakers to communicate their plans for future cuts through the Summary of Economic Projections, the Fed’s quarterly summary of forecasts for GDP growth, unemployment, inflation and interest rates. The market remains split on how many interest rate cuts the Fed will implement in 2025, with expectations ranging from two to three. The timing of the next rate cut is also subject to debate, though most market participants expect cuts to resume in June or July. Fed funds futures contracts are pricing in 100 basis points of cuts by December 2026.

^{Image: The CME FedWatch tool as of Monday, 17 March, indicates that the Fed is expected to hold rates steady on 18-19 March, with traders anticipating three cuts starting in June.}

Bank of England interest rate decision

Thursday 20 March
Economists expect the Bank of England to keep its base rate at 4.5% this month, with the next rate cut predicted to come in June. The market anticipates only two further rate cuts this year. A rate hold on Thursday could weaken the pound, which has strengthened significantly against the dollar in March, though much will also depend on the Fed’s rate decision a day earlier. 

From a 14-month low of less than $1.22 at the start of this year, the pound has risen to almost $1.30 against the dollar. For now, GBP/USD’s upward momentum has stalled at resistance near $1.298. A failure to break through this resistance zone could send the pair lower, possibly towards $1.28, especially if the BoE signals more rate cuts than the market expects. However, if the pound manages to break above $1.30, it could climb towards the next resistance marker at $1.31. 

GBP/USD, September 2024 - present

Micron Technology Q2 results

Thursday 20 March
Analysts estimate that Micron Technology’s second-quarter revenue grew 35.5% year-on-year to $7.9bn, delivering earnings of $1.42 a share, more than triple the year-ago figure of $0.42. Gross margin is expected to have expanded to 38.4%, up from 20% a year ago. Looking ahead to Q3, analysts expect the company to guide revenue of $8.5bn, with earnings at $1.50 a share and gross margin at 37.6%. 

Uncertainty around the Q2 results is high, with the options market pricing in a post-earnings share price move of more than 10%. The memory chip company’s Nasdaq-listed shares were up 8.6% year-to-date at $94.88, as of Thursday’s close. 

The expected post-earnings price swing reflects high levels of implied volatility in the stock. Despite the US stock market’s recent downtrend, the options market is showing considerable call positioning (in options parlance, a call option gives the holder the right, but not the obligation, to buy an asset) on Micron at strike prices of $120 and $125 for expiration on 21 March. This suggests that the stock could decline following the results as implied volatility resets, forcing market makers to unwind hedges.

Although the stock has been range-bound between $85 and $110 since last July, it’s possible that Micron could break support and move lower post-earnings. If that happens, the shares could head towards the next technical support level at $74.50. In contrast, if the stock were to rally on stronger-than-expected results, the gains may be contained to the upper end of the recent trading range around $110. 

Micron Technology share price, October 2023 - present

Key economic and company events

The coming week’s major economic announcements and scheduled US and UK company reports include:

Monday 17 March

• China: February industrial production, February retail sales
• US: February retail sales
• Results: Qifu Technology (Q4)

Tuesday 18 March

• Canada: February consumer price index (CPI)
• Japan: February exports and imports
• Results: Close Brothers (HY), Tencent Music Entertainment (Q4), Trustpilot (FY), XPeng (Q4)

Wednesday 19 March

• Eurozone: February harmonised CPI
• Japan: Bank of Japan interest rate decision
• New Zealand: Q4 gross domestic product (GDP)
• US: Federal Reserve interest rate decision
• Results: General Mills (Q3), M&G (FY), Prudential (FY), Softcat (HY)

Thursday 20 March

• Australia: February unemployment rate and employment change
• China: People’s Bank of China interest rate decision
• Germany: February producer price index (PPI) 
• Japan: February national CPI
• Switzerland: Swiss National Bank interest rate decision
• UK: Bank of England interest rate decision, January unemployment rate, January average earnings, February jobless benefits claimant count change
• US: Weekly initial jobless claims to 14 March
• Results: Accenture (Q3), Darden Restaurants (Q3), FedEx (Q3), James Fisher and Sons (FY), Micron Technology (Q2), Nike (Q3)

Friday 21 March

• Canada: January retail sales
• Eurozone: March flash consumer confidence index
• UK: March GfK consumer confidence index 
• Results: Carnival (Q1), Ceres Power (FY), JD Wetherspoon (HY), Lennar (Q1)

Note: While we check all dates carefully to ensure that they are correct at the time of writing, the above announcements are subject to change.