OIL: NSEA CRUDE: Shell Offers Midland, Forties; Exxon Bids Higher: BBG

Tuesday's Europe rates/bond options flow included:

• RXJ5 132.50c, bought for 46 in 6k.
• RXM5 127.50/126.50/125.50p fly, bought for 5.5 in 3k.
• RXM5 134.5/137.5 call spread sold at 30.5 in 3k
• ERZ5 98.25/9850 call spread bought for 5.5 in 5k.

• GoC yields have completely faded the recent renewed climb in Treasury yields, unwinding the further increase in Can-US yield differentials seen after today’s stronger than expected CAD CPI inflation.
• 2Y yields have limited post-CPI releases to +1bp for +6.6bp from Friday’s close, vs +1.5bp and +3.4bp respectively for Treasuries (both following Family/Presidents’ Day holidays).
• Can-US 2Y yield diff at -150.5bps (+3.2bp since Fri) vs early Feb fresh multi-decade lows of -164bps.
• BoC-dated OIS sees 8-9bp of cuts for the Mar 12 decision vs 12-13bp pre-CPI.
• 3mth CORRA implied yields are 2bp higher post-CPI for 2025 contracts (for as much as 7.5bp higher on the day) whilst the terminal of ~2.6% in early 2026 points to ~40bp of cumulative cuts for the cycle (BoC neutral estimates between 2.25-3.25%).  

• US TSY 52W AUCTION: NON-COMP BIDS $1.294 BLN FROM $48.000 BLN TOTAL