LOOK AHEAD: Friday Data Calendar: Trade Balance, Inventories

US Secretary of State Antony Blinken speaking at a press conference at the G7 foreign ministers' meeting in Italy, says: "We are in the final stages of securing a ceasefire agreement for Lebanon...  We're not there but I believe we're in the final stages."

• Blinken adds: "If we get to the conclusion that I hope we reach very soon it will make a big difference [...] in creating the conditions that will allow people to return to their homes safely in northern Israel and southern Lebanon. I also believe that by de-escalating tensions in the region, it can also help us end the conflict in Gaza. Hamas will know it can’t count on other fronts opening in the war... I hope and believe we can get this over the finish line..."
• Separately, Blinken says the US is "concerned" about Russia-North Korean cooperation, which could boost North Korea's nuclear programme.
• Blinken notes the recent G7 sanctions on Russia's Gazprombank and says "I anticipate further actions by G7 countries."
• Blinken says the G7 is increasingly aligned on the economic and security risks posed by China, "even as we recognise the need for constructive engagement."
• Blinken says that the G7 is engaging China from a "position of strength" and "that's something we'll be about to hand off to the [Trump] administration." 

Treasury sells $70bn of 5Y notes (91282CMA6) at 1300ET after yesterday’s well-received 2Y auction followed Bessent’s weekend pick as Treasury Sec and comments around targeting a US fiscal deficit of 3% GDP.

• 5Y yields are currently 2.8bps higher on the day having recently dipped 1bp with impetus from lower oil.
• The WI yield of 4.190% is 5.2bps higher than October’s high yield of 4.138%, still offering some outright interest but less compelling than yesterday’s 2Y where the WI yield was 15bp higher shortly ahead of the auction.
• Recent 5Y auction stats: the Oct auction tailed by 1.6bps (largest since January) and saw a five-auction average tail of 0.5bp having last stopped through in June.
• The bid-to-cover was 2.39x in both Oct and the five-auction average.
• Primary dealer take was 14.17% in Oct (highest since May) vs a five-auction average of 13.2%.
• Non-dealer takes were more unusual, with indirects taking 76.35% in Oct (highest in our tracking back to 2011) vs a five-auction average of 70.67%. Direct meanwhile took a very low 9.47% vs a five-auction average of 16.09%.