Powell And PPI Feature

Treasuries have edged higher in overnight trade, bouncing from lows set in Asia-Pac trade. Wednesday's schedule centers around PPI data and Fed Chair Powell's congressional testimony.

• TYs retraced about half of the losses made following Tuesday's weak 30Y auction: Sep 10-Yr futures up 4.5/32 at 133-04 (L: 132-30 / H: 133-06.5)
• The 2-Yr yield is down 0.8bps at 0.245%, 5-Yr is down 1.1bps at 0.8347%, 10-Yr is down 1.9bps at 1.398%, and 30-Yr is down 2.5bps at 2.0221%.
• Weekly MBA mortgage applications data is out at 0700ET, but the focus is on the PPI release at 0830ET where signs of further pipeline price pressures will be eyed.
• Powell delivers semi-annual testimony to the House Financial Services Committee at 1200ET. It would be a surprise to hear anything new in the prepared testimony; the Q&A with lawmakers likely to be more interesting.
• Minn's Kashkari appears at 1330ET, while the latest Beige Book is out at 1400ET.
• Supply cools down a little after a busy couple of days, with 1130ET seeing $75B total of 4-/8-week bill sales. NY Fed buys ~$1.425B of 10-22.5Y Tsys, and releases new schedule at 1500ET.
• Pres Biden attends the Senate Democrats' lunch meeting (1245ET) to discuss $3.5T budget resolution, with agreement reached late yesterday by Senate Budget Committee Dems.