Fed sticks to its plan despite recent inflation data

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Fed leaves rates unchanged

The Fed left rates unchanged as expected on Wednesday evening and held onto their outlook for three cuts in borrowing costs this year. Chairman of the Federal Reserve, Jerome Powell, said recent high inflation readings had not changed the underlying "story" of slowly easing price pressures in the US, but added that recent data also had not bolstered the central bank's confidence that the inflation battle has been won. While US dollar and bond yields ticked lower after the Fed decision, gold prices and several indices climbed to record highs.

BoE to publish rates decision

The Bank of England (BoE) will publish its decision on rates at noon on Thursday and is not expected to move. Like all other central banks, the BoE tries to be as transparent as possible and in recent years only moves when it releases its quarterly economic forecasts.

These are out in May and then again in August and it's at that later meeting when the markets are expecting a cut. But wages are a concern for the BoE, as pay is rising faster than consumer price inflation, which is something the BoE hawks are most concerned about.

Japanese trade deficit

In Japan, trade deficit decreased sharply to ¥379 billion in February. Exports rose by 7.8% YoY, a third straight month of growth. Meanwhile, imports increased at a softer 0.5%, the first rise in 11 months.

Australian unemployment rate

In Australia, unemployment rate fell to 3.7% in February to its lowest level since last September, from 4.1% in January, and way below market forecasts of 4%. Employment surged 116.500 to a record 14.27 million.

Manufacturing and PMI data

On Thursday, the market awaits manufacturing and services PMI data around the globe. Also expected today in the US, initial jobless claims and new home sales.

Next and Direct Line Insurance

Next total group sales up 5.9%. Pretax profit rose 5% to £918 million, largely due to better-than-expected clearance rates of sale stock in January. Direct Line Insurance’s written premiums increased 27.1%, with 46.2% growth in H2.

Micron Technology

Memory chip maker Micron Technology saw shares climb 20% all-sessions on the IG platform after AI drove Q2 earnings. It announced second-quarter fiscal 2024 results that beat analysts and offered rosy guidance. The company said it has benefitted from the artificial intelligence boom.

Earnings came in at 42 cents per share. Analysts had expected a 26 cent loss. Revenue also beat the market forecast. For its fiscal third quarter, Micron expects to report revenue of $6.6 billion, above the $6.02 billion expected by analysts.