Tuesday's Losses Unwound

A quiet re-open for T-Notes with the contract opening around its late NY highs, +0-01+ at 133-16, after unwinding Tuesday's losses on Wednesday.

• The cash Tsy curve bull flattened on Wednesday, with the longer end of the curve richening by ~7.5bp come the close.
• Most of the rally came during the NY morning, with the text of Fed Chair Powell's testimony stressing that the central bank is a ways away from achieving its "substantial further process" marker, while underscoring that there is a need for continued discussions re: tapering "in coming meetings."
• On the geopolitical side of the coin a BBG sources piece suggested that "U.S. Treasury Secretary Janet Yellen and her staff have no plans to resurrect the regular U.S.-China economic dialogue that governed ties between the two nations during the Bush and Obama administrations, continuing for now the suspension put in place under President Donald Trump. While Yellen's team, and those of other departments, are in touch with Chinese counterparts, the expectation for now is not to restart formal high-level talks."
• Large screen buying of EDM2 dominated on flow side on Wednesday.
• The quarterly GDP and monthly economic activity prints out of China & the latest Australian labour market report headline the economic docket during Asia-Pac hours, while weekly jobless claims and regional Fed activity indices are due to be released during NY hours. Elsewhere, Fed Chair Powell will testify on the Hill for a second day, while Chicago Fed President Evans ('21 voter) will speak on the economy.