N.American Wrap: Crazy then calm

• Portugal FinMin: Risk of contagion from Greece exists, reflected in bond markets
• Greek senior govt source: Greece may get short term bridge loan before aid mechanism is activated
• Moodys cuts Greece’s sovereign ratings to A3 from A2; on review for further possible downgrade
• Pres Obama: As a result of decisions made, some unpopular, “we are seeing hopeful signs ” in economy
• US March PPI +0.7% m/m, +6.0% y/y, stronger than median forecasts +0.4%, +5.8% respectively
• US jobless claims fell to 456k April 17 week from 480k prior week, in line with median forecast 455k
• US March existing home sales 5.35 mln annual rate, stronger than median forecast 5.28 mln
• Euro zone April consumer confidence -15.2 vs March revised -17.3. For wider EU indicator rose to -12.5 from -13.9 - EU  Commission flash estimates
• Japan FinMin: Market worries of Japan’s fiscal state will ease once govt reform framework released
• BOC’s Carney: Interest rate commitment was unconventional policy measure for extraordinary times, but those extraordinary times are now over
• Spain’s EconMin Salgardo:  Spain is in a very good situation on debt levels.  In midst of fiscal consolidation, “things are going well”
• EU’s Rehn: There is no doubt that the German govt is committed to aiding Greece if needed.  Increasingly likely Greece will have to request aid

Crazy morning, calm afternoon.

EUR/USD finishing around 1.3310 from an early 1.3345, having been as low as 1.3260 in a frenetic morning session. Stronger than expected PPI data and improvement in jobless claims from prior week helped trip stops through 1.3330.  Then comment from Portuguese FinMin using word “contagion” helped trip stops through 1.3300.

That took us to 1.3277. There were conflcting reports of decent stops through 1.3280 but also belatedly talk of bids from 1.3280 through 1.3260.  A central bank stepped in and bought around 1.3280 and we were headed back toward 1.3300 when news Greece may get bridging loan saw pairing spike above 1.3300.  The reprieve was short-lived though as Moody’s downgrade shoved the pairing to session low 1.3260 in the blink of an eye. 

From 1.3260 its been a more gradual recovery back over 1.3300 as general risk sentiment improved and US stocks rallied back. 

USD/JPY finishing up on day, presently at 93.45 from early 92.90.  Afternoon improvement in risk sentiment has helped underpin USD/JPY with US treasury yields higher.  10-year yield up at 3.7781 from 3.7472 late Wednesday, 30-year yield up at 4.6402 from 4.6178. 

 There has been talk of stop loss orders just above 93.50 but we’ve not seen any pop so far, session high being 93.54 in late trade.  Talk of buy orders down at 92.50/70 will have helped underpin pairing as well.  

Cable at 1.5380 little changed from early 1.5395.  We got as low as 1.5343 at the height of the morning frenzy.  There will be some interest in tonight leaders televised debate.  A good performance from Cameron would lift tories in polls and improve chances of UK dodging hung parliament and probably result in boost for sterling. A bad performance and we’ll probably see reverse.