The financial week in five charts: Houthis, gilts and wildfires

**1. RED ALERT!** RON BOUSSO, ROI Energy Columnist: Saudi Arabia's Yanbu export hub on its west coast, which depends on the Bab el-Mandeb Strait, became the kingdom's primary outlet for crude exports after the Strait of Hormuz was largely blocked following the outbreak of war on February 28. But what initially appeared to be a successful workaround has now become a target after the Iran-backed Houthi militia declared a blockade against Saudi vessels seeking to pass through the strait. This could prove to be one crisis too many for today's strained energy markets. **2. GILT TRIP** MIKE DOLAN, ROI Finance & Markets Columnist: Even though benchmark 10-year British government borrowing rates remain the highest of the G7 nations - around 5% - they have stayed relatively calm amid new Prime Minister Andy Burnham's spectacularly quick ascent. Sensitivity to some of Burnham's specific plans may have been curbed by two big potential buffers: moderating inflation pressures and a drop in UK borrowing due to former Chancellor Rachel Reeves' adherence to fiscal rules. Still, gilt market discontent remains a risk if Burnham fails to boost the Labour Party's election prospects, as that would increase the likelihood of a victory by the right-wing Reform UK party - an unpredictable wildcard for most investors. **5. WILDFIRES' COLLATERAL DAMAGE** GAVIN MAGUIRE, ROI Global Energy Transition Columnist: More than 70 large wildfires have been burning across the United States, and they are causing serious problems for the country's power producers. Smoke is reducing the amount of solar radiation that hits solar farms, reducing the amount of power generated and making it harder to predict power flows across transmission lines. These fires are also causing this disruption when grids can least afford it - right as heat waves are upping demand. **3. YEN DOOM LOOP** JAMIE MCGEEVER, ROI Markets Columnist: The yen sank to its lowest level against the dollar in 40 years this week, as the dollar/yen rate rose above 163.00. While there are many causes of this - including overall dollar strength and rising crude prices - Japan also appears to be stuck in a policy "doom loop". Global investors appear to have taken a dim view of Japan's current policy mix: the fiscal stance is too loose, monetary policy is not tight enough, and as ever with Japan, the coziness between the two is stoking market concerns about the Bank of Japan's independence. Options for escaping this predicament are limited. **4. CRUDE VS FUELS** RON BOUSSO, ROI Energy Columnist: While crude prices may have garnered all the headlines in recent months, refined products like gasoline, diesel and jet fuel are coming under far greater pressure. The global refining sector is being squeezed from many sides, including the latest disruption in crude deliveries in the Middle East as well as curtailed refinery operations in Russia due to Ukrainian drone attacks on energy infrastructure. Indian refiners are ramping up production, but that may only help on the margins. Every Friday, Reuters Open Interest (ROI) distills the financial week into five key charts, spotlighting the major trends, surprises and overlooked moves that defined the past five days.

The financial week in five charts: Houthis, gilts and wildfires

Red alert and gilt trip

Wildfires' collateral damage

Yen doom loop and crude vs fuels

Reuters Open Interest’s weekly chart roundup

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