European FX Open - USD steady as Biden withdraws

The broader USD is mixed following the news that President Joe Biden announced Sunday he's no longer seeking the Democratic Party's nomination, saying his exit from the race was in the best interests of his party and the country. Biden, 81, had increasing calls to step aside since last month's TV debate against Donald Trump.

BBC News report a growing number of senior Democrats are backing V-P Kamala Harris to be the party's presidential candidate, after Joe Biden quit the race. Her supporters include Gavin Newsom and Pete Buttigieg, who themselves were touted as possible nominees; Biden has endorsed Harris, who says she intends to 'earn and win' the nomination. Biden will remain as president for now, but the Republican nominee, Donald Trump, says 'if he can't run for office, he can't run our country'.

US politics will stay a focus today with very little scheduled ahead. Swiss sight deposits and the Chicago Fed national activity index today.

Elsewhere, against overall expectations, the PBOC cut their 1 and 5-year loan prime rates by 10BPs each to 3.35% and 3.85% respectively, a first easing in almost a year, stepping up support for the economy after growth disappointed and steering a shift toward a new policy benchmark. Meanwhile, Bbg reports President Xi Jinping 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.

USD/CNH made light gains overnight, back towards the psychological and possible line in the sand 7.3000-73114 area.

In other markets, oil enjoyed a minor rebound after Friday's selloff, as investors weighed the fallout from Biden's decision and wildfires disturbed some production in Canada.

And, all US stock futures are small in the green despite some disturbing news on the geopolitics front. Israel struck the Houthi-held port of Hodeidah in Yemen, killing three people and wounding 87, in retaliation to the militants drone attack on Tel Aviv. Israel's PM Netanyahu is scheduled to meet Biden tomorrow.

In the UK, The Times writes Rachel Reeves is preparing to hand millions of public sector workers an above-inflation pay rise and attempt to blame the Conservatives for any tax rises needed to fund it. The chancellor is understood to be minded to accept recommendations for a 5.5% pay rise for teachers, nurses and other NHS workers, with similar deals in prospect for other public sector staff.

And, Makhlouf told the Irish Examiner the ECB is in no rush to decide on rate cuts; the process of bringing inflation back to the 2% target is working.

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