BoE's Bailey: Large and small companies will need new equity

Eren Sengezer FXStreet

The UK banks must address the serious strain on their operational capacity for handling the surge in the loan demand, Bank of England Governor Bailey told reporters on Friday and noted that large and small companies will need new equity.

Additional takeaways

"The IMF sees a V-shaped recovery for the global economy but there is a huge amount of uncertainty."

"Global policymakers in IMF meetings showed a very clear commitment to do what is necessary."

"OBR's scenario of 35% fall in UK GDP in Q2 is not implausible."

"The MPC will set out its view very clearly in may on how much scarring the UK economy faces."

"The UK government has not yet used its extended ways and means overdraft facility with the BoE, gilts market is pretty orderly."

"Can't say at this point how long the BoE will hold on to gilts it has bought."

"Must avoid public sector policy decisions crowding out private sector investment when crisis eases."

"The UK's fiscal response to COVID-19 crisis may help banks in the next stress tests."

Market reaction

The GBP/USD pair continues to cling to modest daily gains near the 1.2500 handle after these comments.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

AUD/USD eyes 0.7150 barrier nine-day EMA

AUD/USD inches higher after registering modest losses in the previous day, trading around 0.7130 during the Asian hours. The technical analysis of the daily chart indicates that the pair is moving sideways within the rectangle pattern, suggesting a consolidation as neither the bulls nor the bears have enough momentum to take control of the market.

USD/JPY trades below 160.00 intervention threshold; bullish bias intact

The USD/JPY pair attracts some sellers during the Asian session amid fears that authorities will step in again to prop up the Japanese Yen. Furthermore, the Israel-Lebanon truce prompts some profit-taking around the US Dollar and exerts downward pressure on the currency pair.

Gold defends 200-day SMA, rises toward $4,500

Gold is attempting a tepid recovery toward $4,500 on Thursday, as renewed optimism in the Mideast geopolitical front calms market nerves. This cautious optimism across Asian markets weighs on Oil prices, and diminishes the US Dollar’s safe-haven appeal, helping Gold stage a decent comeback from the weekly low of $4,424.

Hyperliquid: ETF demand, capital rotation fuel HYPE rally as Bitcoin melts

Hyperliquid price sustains an upward trend near its all-time high of $75.76 on Thursday after posting 80% gains in May, while Bitcoin (BTC) retraces below $65,000, triggering a market-wide panic.

Kevin Warsh takes the Fed helm: What it means for the US Dollar

The Federal Reserve moves away from the highly predictable "forward guidance" model of the Jerome Powell era to a new “Kevin Warsh environment”, characterized by less communication, more policy surprises, and an increased focus on the Fed's complex balance sheet.

Recession on paper: What really moves the Canadian Loonie now?

Statistics Canada handed the headline writers a gift and the analysts a headache. Real GDP shrank 0.1% on an annualized basis in the first quarter, and with the fourth quarter of 2025 revised down to a 1.0% contraction, that is two negative quarters in a row, the textbook definition of a technical recession and Canada's first since the pandemic.