OIL: Russian Oil Shipments Shift to Western Tankers

Wednesday's Europe rates/bond options flow included:

• OEJ5 116.5/116/115.5p fly, bought for 9.5 in 5k.
• RXK5 130.50/131.50cs, bought for 13 in 5.5k.
• ERJ5 97.6875/97.62/97.5625p fly, bought for 0.75 in 14.5k Total.
• ERK5 97.50/97.4375, bought for 0.25 in 10k.
• ERM5 97.8125/97.875/97.9375/98.00 call condor, paper pays 0.75 on 5k
• ERM5 97.9375/98.0625 cs, bought for 2.25 in 40k.
• ERM5 97.6878/97.75/97.875c fly, bought for -0.5 in 15k.
• ERM5 97.8125/97.9375/98.0625 call fly, paper pays 1.75 for 8k
• ERM5 97.87/98.00/98.12c fly, sold at 2 in 37k total.
• ERM5 97.87/98.00/98.12/98.25c condor, bought for 2.75 in 8k.

• Date $MM Issuer (Priced *, Launch #)
• 03/12 $2.25B #Stellantis $500M 3Y +140, $750M 5Y +170, $1B 10Y +215
• 03/12 $2.2B #Amcor Flexibles NA $725M 3Y +83, $725M 5Y +103, $750M 10Y +125
• 03/12 $1.5B #SoCal Edison $850M 5Y +118, $650M 30Y +160
• 03/12 $Benchmark Canadian Pacific Railway 5Y +75, 10Y +95
• 03/12 $500M #Equitable Holdings WNG 30NC10 6.7%
• 03/12 $Benchmark NetApp Inc 7Y +130, 10Y +140
• 03/12 $1B OMERS Finance 5Y SOFR+69a
• 03/12 $750M PBF Holding 5NC2
• 03/12 $Benchmark AES 7Y +175a
• 03/12 $Benchmark CGI Inc 5Y +100
• Expected Thursday:
  • 03/13 $Benchmark World Bank 5Y SOFR+44a

As anticipated after the CPI release, analysts have upped their expectations for February's core PCE reading to a median consensus of 0.31% M/M per the notes we've seen (vs 0.24% prior to today, and an acceleration from 0.29% prior) for what would be an 11-month high. 

• Various factors are likely to bring core PCE in above its CPI equivalent (0.23%), with the downside surprise in core CPI largely due to softer-than-expected airfares and auto insurance - categories that don't feed from CPI into PCE.
• Instead those categories will come from Thursday's PPI report, along with other categories such as portfolio management.

Post-CPI estimates for February core PCE % M/M:

• Goldman: 0.29% (was 0.25% pre-CPI)
• BofA: 0.30-0.32% (was 0.23% pre-CPI)
• JPMorgan: 0.31%
• TD Securities: 0.31%
• Morgan Stanley: 0.32% (was 0.28% pre-CPI)
• Nomura: 0.32% (was 0.28% pre-CPI)
• Wells Fargo: 0.35%