IRAN: RTRS-Off: Framework Deal Possible If US Splits Nuclear/Non-Nuclear Issues

RXH6 126.5/125.5ps 1x2, sold at 4.5 down to 4 in 2k.

• ADP private employment saw an average weekly increase of 7.75k across the four weeks ending Jan 3 after 8k to Dec 27 (unrevised) and 11k to Dec 20 (revised from 11.25k).
• Getting closer to its monthly reference period, i.e. the week including the 12th day of the month, this week’s monthly equivalent of 31k follows 32k from last week.
• It’s a little slower than the 42k in the week corresponding with its December reference period (revised up from 41k in today’s weekly update and last month’s full release) but it’s stronger than the -29k in November.
• The monthly series had been oscillating in recent months between small increases and declines (-3k Aug, -29k Sep, 47k Oct, -29k Nov and 41k Dec) although now appears on track for two modest monthly increases.
• Correlation with BLS private payrolls remains limited, with ADP close for December with just 4k overshoot but a large 79k undershoot in November compared to private payrolls growth of 50k (at least in the latest vintage).
• Still, the ADP data have provided a useful trend over the past year, moderating in 1H25 before at best limited growth since then (averaged 22k per month through 2H25, but with 104k of the cumulative 131k increase coming in July).
• St Louis Fed's Musalem told an MNI event earlier this month that his economists estimate an overall nonfarm payrolls breakeven pace somewhere between 30-80k per month. 

• While the ICE dollar index remains shy of the 2025 lows, it is worth highlighting that price action today has prompted the Bloomberg dollar index to fall to the lowest level in nearly four years. Reflective of the broader moves outside of the G10 majors, today’s extension lower for the index is better reflective of the persistent strength for the likes of Mexican peso, the Chinese Yuan and the Australian dollar.
• As noted, developments surrounding Greenland, the growing likelihood of a Rieder led Fed, rising probability of another gov’t shutdown and the FX accord between US and Japanese officials have been weighing on the greenback. Furthermore, the resilient backdrop for risk sentiment/equities and the ongoing surge for precious metals continues to foster a supportive environment for higher beta currencies.
• Price action for the BBDXY this week has also seen the index break a notable trendline, drawn from the July 2014 lows, potentially exacerbating the broader price action this week. A key downside target for the BBDXY comes in at 1162.11, the 2022 low.
• Price moves come ahead of the Fed meeting tomorrow. For those that missed, we sent our full preview with analyst views late yesterday: https://mni.marketnews.com/3Z42fX7