---
title: "Dollar slips as Biden quits race, China bonds gain: markets wrap"
description: "The dollar slid and Treasuries rose after Joe Biden ended his re-election campaign and endorsed Vice President Kamala Harris. Chinese bonds gained after the central bank cut a policy interest rate."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "Business Maverick"
author: "Bloomberg"
author_url: "https://www.dailymaverick.co.za/author/bloomberg/"
canonical_url: "https://www.dailymaverick.co.za/article/2024-07-22-dollar-slips-as-biden-quits-race-china-bonds-gain-markets-wrap/"
published: "2024-07-22T05:27:03"
updated: "2024-07-22T05:27:04"
lang: "en-ZA"
word_count: 496
---

# Dollar slips as Biden quits race, China bonds gain: markets wrap

> The dollar slid and Treasuries rose after Joe Biden ended his re-election campaign and endorsed Vice President Kamala Harris. Chinese bonds gained after the central bank cut a policy interest rate.

By Bloomberg · Published 22 July 2024, 07:27 SAST · Updated 22 July 2024, 07:27 SAST

## Content

The yield on China’s 10-year sovereign note dropped nearly 2 basis points, after the People’s Bank of China [reduced](https://www.bloomberg.com/news/articles/2024-07-22/pboc-cuts-seven-day-reverse-repo-rate-to-1-7-to-support-economy)a short-term rate for the first time in almost a year, stepping up support for growth. Benchmark bond futures of the same tenor rose to a record.

Chinese stocks declined, adding to regional losses from Japan to Australia amid weakness in the tech sector. Taiwan Semiconductor Manufacturing Co. fell as much as 3.3%. US equities futures edged up.

China’s policy easing is “an acknowledgment that there’s immense economic downward pressure,” Michelle Lam, Greater China economist at Societe Generale, told Bloomberg TV. “It also signals that policymakers are determined to support the economy.”

A Bloomberg gauge of the US currency’s strength shed 0.1%, while the 10-year Treasury yield dropped 1 basis point. The Mexican peso climbed, gold [gained](https://www.bloomberg.com/news/articles/2024-07-21/gold-climbs-as-us-election-chaos-escalates-after-biden-drops-out), Bitcoin rose to the [highest](https://www.bloomberg.com/news/articles/2024-07-21/bitcoin-traders-celebrate-as-biden-bows-out-of-us-presidential-race-btc) in over a month.

Investors have mulled for weeks a greater prospect that Donald Trump will win the November election following Biden’s weak debate performance, only for bets on a Trump win to accelerate last week following an assassination attempt on the Republican candidate a week ago. The question for investors is whether to stick with such trades now that Biden has dropped his bid for re-election.

“Facing bombshell surprises for the second week in a row, the Asian market will be under intense scrutiny,” said Hebe Chen, an analyst at IG Markets. “The accelerated wave of risk aversion could hit Asian stocks harder than the previous week as investors digest the unfamiliar political context. The forex market will also feel the heightened pressure.”

The S&P 500 dropped 0.7% on Friday to cap its worst week since April. Tech shares fell ahead of earnings reports this week, while CrowdStrike Holdings Inc., the firm behind a massive IT failure that grounded flights and disrupted corporations around the world, slumped as much as 15% before paring losses.

Tesla Inc. and Alphabet Inc. will be the first of the “Magnificent Seven” to report earnings on Tuesday. Analysts will likely press Elon Musk’s electric-vehicle giant on the progress of its plans for robotaxis. And investors will delve into the details of Google’s parent revenue boost from artificial intelligence.

Back in China, banks [cut](https://www.bloomberg.com/news/articles/2024-07-22/chinese-banks-cut-main-lending-rate-after-surprise-pboc-trim) their main benchmark lending rate for the first time since August 2023, ramping up support for economic growth following the PBOC’s rate reduction.

President Xi Jinping at the weekend unveiled sweeping plans to bolster the finances of China’s indebted local governments as the ruling Communist Party announced its long-term blueprint for the world’s second-largest economy. Those are centered around shifting more revenue from the central to local coffers, such as by allowing regional governments to receive a larger share of consumption tax.

Elsewhere this week, traders will be focused on economic activity data in Europe, US second quarter growth and a slew of corporate earnings. The Bank of Canada will give a rate decision while the Federal Reserve’s preferred measure of inflation is also due.