Bitcoin falls nearly 8% as cryptocurrency slide continues
Mark Vandevelde in New York
Bitcoin fell by nearly 8 per cent during an hour of frenzied trading on Thursday afternoon in the US, extending a day of losses that reversed most of the cryptocurrency’s gains since June.
The price of a token briefly fell to as low as $25,409, according to data from CoinMarketCap, before staging a partial recovery.
The whipsaw price action left the digital asset changing hands for 15 per cent less than the $31,814 high registered in July, echoing recent declines in stocks, bonds and other financial assets.
Falling energy prices push Japan’s core inflation lower
Leo Lewis in Tokyo
Falling energy prices nudged Japan’s consumer price inflation rate lower in July, confirming the predictions of central bankers that inflation would slow heading into the second half of the year.
The rate of core inflation, which excludes volatile fresh food prices, was 3.1 per cent, down from 3.3 per cent in June and exceeding the Bank of Japan’s 2 per cent target for a 16th straight month.
Underlying “core-core” inflation accelerated to 4.3 per cent from June’s 4.2 per cent as hotel charges and other service prices rose.
At the BoJ’s latest meeting, one committee member said that the year-on-year rate of CPI inflation was likely to decelerate as the effect of high import prices last year began to subside.
What to watch in Asia
William Langley in Hong Kong
Summits: US president Joe Biden hosts Fumio Kishida and Yoon Suk Yeol, his Japanese and South Korean counterparts, at Camp David on Friday. Biden is set to announce a landmark trilateral agreement that will help Washington and its Asian allies boost deterrence against North Korea and China.
Economic data: Malaysia publishes second-quarter GDP figures on Friday. Economists expect the data to show growth slowing in the quarter that ended in June. Japan, meanwhile, releases consumer price index figures for July.
Markets: Stocks futures declined in Japan and Hong Kong on Friday. A rise in US sovereign bond yields, which neared their highest levels since 2007 on Thursday, weighed on the country’s equities, with the Nasdaq Composite dropping 1.2 per cent and the S&P 500 ending 0.8 per cent lower.
Singapore: Prime Minister Lee Hsien Loong is to give a National Day Rally speech on Sunday, some 10 days after the country’s National Day holiday on August 8. The speech is considered among the most significant political addresses of the year in the island-state.
China Evergrande files for bankruptcy in New York
Sujeet Indap in New York
Evergrande defaulted on its debt in 2021, sparking a property crisis in China’s economy
Troubled property group China Evergrande has filed for bankruptcy protection in a New York federal court using the so-called Chapter 15 process for foreign companies seeking recognition of their restructuring in the US.
According to the petition, Evergrande is also pursuing a parallel “scheme of arrangement” in the Cayman Islands, as well as a restructuring proceeding pending before the High Court of Hong Kong.
The petition was signed by Jimmy Fong, who listed himself as a “foreign representative” of China Evergrande Group. A meeting of “scheme creditors” is set for August 23 at the Hong Kong office of Sidley Austin, the US-based law firm representing Evergrande.
CVS shares take biggest hit in 10 months after ending its pharmacy service
Jamie Smyth in New York
Shares in CVS Health fell more than 8.1 per cent at the close on Thursday after a decision was made by the insurer to drop its Caremark unit as its main pharmacy benefit manager (PBM).
The fall was the largest in a single day for shares in the company — one of California’s largest health insurers — since October last year.
Health plan provider Blue Shield of California said it would work with other companies, including Amazon and the Mark Cuban Cost Plus Drug Company, to supply medicines to its 4.8mn customers.
The insurer said the US drug purchasing system, which is dominated by PBMs — essentially drug middlemen — is “broken” and that it expected to save $500mn in annual drug costs with its new model.
US escalates trade dispute with Mexico over corn
Christine Murray in Mexico City
The US government has escalated a trade dispute with Mexico over its ban on genetically modified corn, reflecting the political power of US corn belt states ahead of the 2024 presidential election.
Washington requested a dispute resolution panel on Thursday, which would make a binding decision under the US-Mexico-Canada trade pact. The trade dispute is also reputational, with the US contending that genetically modified corn is not harmful to humans.
Mexican president Andrés Manuel López Obrador’s administration has said the measures to limit genetically modified corn are to protect the population’s health. The US claims the rules violate the trilateral trade agreement and are not based on scientific evidence.
Citadel fund to finance most of $142.5mn bankruptcy loan for trucker Yellow
Sujeet Indap in New York
A Citadel credit fund has agreed to provide most of the pricey financing to bankrupt trucking company Yellow, having recently acquired an existing $500mn loan to the group previously held by Apollo Global Management.
Yellow, which filed for bankruptcy protection earlier this month, has secured a $142.5mn bankruptcy loan and struck a deal to sell its real estate for $1.3bn, its lawyers told federal bankruptcy court on Thursday.
That deal will have the Citadel fund provide $100mn of so-called debtor-in-possession financing, while Yellow’s largest stockholder, MFN partners, will provide the remaining $42.5mn.
Estes Express Lines has bid $1.3bn for Yellow’s terminals, which would cover all the group’s existing secured debt.