(Bloomberg) — Chinese government bonds rose after the central bank cut a key policy rate. The dollar slipped after Joe Biden ended his reelection campaign and endorsed Vice President Kamala Harris.

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The yield on China’s 10-year sovereign note slid nearly 2 basis points, after the People’s Bank of China reduced a short-term rate for the first time in almost a year, stepping up support for growth. The country’s 10-year bond futures rose to a record high.

Chinese stocks dropped in early trade, adding to regional declines from Japan to Australia amid continued weakness in the tech sector. US equities futures edged up.

A Bloomberg gauge of the US currency’s strength shed 0.1% Monday, with Treasuries steady. The Mexican peso climbed, gold gained, Bitcoin rose to the highest 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 reelection.

“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.

Instead, 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.

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“Like most documents of this kind, it did not say how Chinese leaders intended to reach those goals, many of which would require policies that are contradictory in nature,” said Bob Savage, head of markets strategy and insights at BNY Mellon. “The contradiction of China growth vs. stability are hanging over APAC markets and flows, still leaving Chinese yuan and commodities a key focus.”

Chinese banks cut their main benchmark lending rate for the first time since August 2023, ramping up support for economic growth following the PBOC’s rate reduction.

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.

Key events this week:

• Hong Kong CPI, Monday

• Taiwan jobless rate, export orders, Monday

• Mexico retail sales, Monday

• Israeli Prime Minister Benjamin Netanyahu embarks on visit to Washington, Monday

• EU foreign ministers meet in Brussels, Monday

• Singapore CPI, Tuesday

• Taiwan industrial production, Tuesday

• India’s budget for fiscal year through March 2025, Tuesday

• Turkey rate decision, Tuesday

• Eurozone consumer confidence, Tuesday

• Alphabet, Tesla, LVMH earnings, Tuesday

• Malaysia CPI, Wednesday

• South Africa CPI, Wednesday

• Eurozone HCOB PMI, Wednesday

• UK S&P Global PMI, Wednesday

• Canada rate decision, Wednesday

• IBM, Deutsche Bank earnings, Wednesday

• ECB Vice President Luis de Guindos speaks, Wednesday

• Hong Kong trade, Thursday

• South Korea GDP, Thursday

• US GDP, initial jobless claims, durable goods, merchandise trade, Thursday

• G-20 finance ministers and central bankers meet in Rio de Janeiro, Thursday through Friday

• Bitcoin 2024 conference in Nashville, Thursday through July 27

• Japan Tokyo CPI, Friday

• US personal income, PCE price index, University of Michigan consumer sentiment, Friday

• Mexico trade, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.2% as of 10:39 a.m. Tokyo time

• Nikkei 225 futures (OSE) fell 1.2%

• Japan’s Topix fell 0.8%

• Australia’s S&P/ASX 200 fell 0.7%

• Hong Kong’s Hang Seng rose 0.1%

• The Shanghai Composite fell 0.4%

• Euro Stoxx 50 futures rose 0.4%

Currencies

• The Bloomberg Dollar Spot Index fell 0.1%

• The euro rose 0.1% to $1.0893

• The Japanese yen was little changed at 157.45 per dollar

• The offshore yuan was little changed at 7.2890 per dollar

Cryptocurrencies

• Bitcoin was little changed at $67,797.63

• Ether rose 0.9% to $3,529.65

Bonds

Commodities

• West Texas Intermediate crude rose 0.4% to $80.49 a barrel

• Spot gold rose 0.3% to $2,409.12 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Joanna Ossinger, Richard Henderson, Matthew Burgess, Ruth Carson and Winnie Zhu.

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