[MARKET ANALYSIS] USD bid in tandem with oil, GBP knocked by the potential of a Burnham premiership, high-beta underperform

G10s showing a risk-off bias as the Buck rises in tandem with crude prices and yields. Antipodeans are the underperformers, while EUR and GBP also lag amid energy/political-related headwinds.
DXY continues to perform well, vaulting 50,100 and 200 DMAs over the past two sessions amid a mix of hot US inflation data, resilient jobs data/retail sales and exponentially firm oil prices. The session ahead is absent of major data/speakers, and as such, the Greenback will likely be dictated by incoming geopolitical headlines. As a reminder, Warsh today officially takes the title of Fed Chair, while Powell becomes governor and Miran steps down. MUFG, in its morning note, said, "This week has seen the rolling correlation between DXY and the 2-year US-DXY rates spread strengthen notably, which points to scope for US dollar strength to extend further if rate hike pricing momentum continues."
High-beta SEK and Antipodeans are the worst G10 performers, with NZD -1%, AUD -0.8% and SEK -0.8% against the strong Buck as risk sentiment is sour on unconstructive geopolitical headlines. See Iranian War Day 77 on the headline feed.
Once again, the centre of attention continues to be UK political developments, as markets increasingly price in the possibility of a left-leaning Burnham premiership after he announced his running in an engineered Makerfield by-election. (See 07:35 BST analysis). Sterling has weakened since the announcement on Thursday evening, but losses are somewhat limited given the continued uncertainty about whether the Manchester Mayor would be able to 1) Succeed in winning the by-election, 2) Beat incumbent Starmer in a leadership challenge. Elsewhere, keep an eye on a potential announcement on a support package for bills next week, after Housing Secretary Steve Reed touted it this morning. GBP/USD fell to a 1.3350 low, where it found support. EUR/GBP topped at 0.8727 as the pair's rally lost steam above the key 0.8720 mark. ING notes the risk premium EUR/GBP is now 0.8%. The bank also said previous political/fiscal concerns saw a 2%+ risk premium, meaning risks remain for the pair.