The US Environmental Protection Agency will drop renewable fuel quotas at a press conference scheduled shortly.
Meanwhile, casting himself as some kind of environmental warrior, Obama has held up the Keystone XL pipeline for six years and lied about where the oil from the pipeline will go.
“Understand what this project is: It is providing the ability of Canada to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else. It doesn’t have an impact on US gas prices,” said Obama, who is traveling in Asia.
That’s a gross misunderstanding. First, it’s illegal to export US crude. Second, the Keystone XL oil will be mixed with US oil and if one drop is mixed in, none of it can be exported. Third, if gasoline is later exported, US refineries still benefit. Fourth, adding the marginal Canadian crude to the US market will certainly lower US gasoline prices now and in the future. Fifth, estimates are that — at maximum — 10% of the gasoline created from Keystone XL oil will be exported.
While he’s been diddling with that, the EPA failed to set renewable blend targets to gasoline in 2014 and with only 6 weeks left in the year, they’re dropping it.
With winter beginning to bear down, who could turn down a job in California?
The Labor Department delivered its state-by-state breakdown of the US jobs picture and the usual suspects led the way. California added 41.5k jobs, Texas 35.2k and Florida 34.4k.
That’s largely driven by the huge populations of those states. But if you’re a job hunter, North Dakota is easily the best place to be with an unemployment rate of just 2.8% while California is near the bottom at 7.3%.
The state report shows over all US unemployment down to 6.0% in October from 6.2% in September but that’s still below the nationally reported rate of 5.8%.
The top sectors were ‘trade, transportation and utilities’, ‘government’, ‘education and health’ and ‘professional and business services’. The top three sectors aren’t particularly driven by the private economy and that’s worrisome.
The JPY has been a focus currency of late with the bias being to the downside. The currency is higher today against most of the major currencies except the commodity currencies (CAD, AUD and NZD) but overall, the changes are somewhat minimal.
The USDJPY is mixed today, up a little against the EUR, GBP, CHF and USD, but down against the AUD, CAD and NZD
Looking at the USDJPY, the pair is down on the day, fell below some trend lines in the process (see chart below), but has a bunch of red and green bars indicative of a “market” that is more ambivalent at the moment. It seems to be taking in the action of the EUR and is enjoying being in the background.
The USDJPY has some bearish/consolidation clues, but remains above key support too.
The pair remains above the 100 hour MA (blue line in the chart above) and seems to be forming another trend line on the downside, above that MA level. So although there is a move below the trend lines, the action suggests it is more “just because it ran out of upside speed”. A move below the 100 hour MA (and staying below) would be more of a bearish event.
Can sellers take some joy? Yes. Can you sell? Yes, there is the break and slowing of the rally. Are they comfortable? Not totally (watch 117.93-118.00 as risk – the 117.93 was the high going back to October 2007). The buy the dip remains more of a theme vs. the high is in place. Get below the 100 hour MA (blue line in chart currently at the 117.42 level) and comfort may be increased, but the 117.00 level remains another key support level that should give cause for pause on any sell off (old ceiling high and the 38.2% retracement is at the level).
PS..I should also point out, that correction from the high to the low is 160 pips. The Adam 150 pip rule is in effect (of course it gets harder as the price trends higher).
MNI report a senior EU official saying that Greece can extend the bail out program but with strict conditionality, if the fifth Troika review is not completed by the end of December. EU’s Jeroen Dijsselbloem has made clear he expects the review to be completed on time, but the official stated the extension;
“it is technically possible for up to 12 months,but it has been made clear to the Greek authorities that a new memorandum of understanding will be signed which will include all the tough measures Greece needs to take and all the pending structural reforms and pre-requisitions.”
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