Balance of Power

Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up here.

Voters in Buenos Aires province just pulled the plug on Javier Milei and his austerity.

The libertarian president’s party got wiped out yesterday in the most consequential election he’s faced since taking office nearly two years ago, losing Argentina’s biggest province by 13 percentage points to his Peronist opponents on their home turf.

The vote was Milei’s best chance at closing the chapter on Peronist standard bearer Cristina Kirchner’s reign before national midterms next month. His campaign slogan was “Kirchnerism Never Again,” provocatively using the same text font for “Never Again” as a 1984 report into Argentina’s military dictatorship.

Instead, Kirchner emerged from house arrest last night to dance on her apartment balcony and mock her rival on social media.

Kirchner greets supporters from her balcony yesterday. Photographer: Tobias Skarlovnik/Getty Images

“We suffered an electoral setback and we have to accept it,” a rarely contrite Milei admitted. He was surrounded by his ministers and sister-turned-adviser Karina Milei, who is engulfed in bribery allegations that the government denies.

It’s a dismal turn of events for Milei. Earlier this year, he triumphantly wielded a custom-made chainsaw for then-DOGE chief Elon Musk on stage in Washington. The IMF gave his government most of a $20 billion deal up front. Inflation hit a five-year low. He cruised to electoral victory in the city of Buenos Aires in May.

That momentum has now been halted, mirroring Argentina’s stuttering economic recovery.

Unemployment is rising. Inflation is eroding wages in the formal workforce. Once-optimistic investors have started dumping Argentine bonds. Even Musk ended up regretting hoisting Milei’s chainsaw, saying it “lacked empathy.”

Milei promised to take a deep look in the mirror on strategy, but he pledged to hold fast to his signature economic policies.

His administration was already intervening in Argentina’s currency markets to prop up the peso.

More volatility lies ahead before his next major test: the Oct. 26 midterms. — Patrick Gillespie

Milei speaks during an election rally yesterday. Photographer: Anita Pouchard Serra/Bloomberg

Global Must Reads

Prime Minister François Bayrou’s minority government will likely fall today in a French parliamentary confidence vote, after opposition parties mobilized against his proposals to trim the nation’s budget deficit. President Emmanuel Macron’s options if Bayrou loses include naming a new premier or dissolving the lower house and calling early elections, which aides have said is not part of his plans for the time being.

WATCH: Caroline Connan discusses Monday’s French vote on Bloomberg TV.

The European Union is exploring new sanctions on Russian banks and energy companies to pressure President Vladimir Putin to end the war against Ukraine, sources say. The US and Europe are hoping a Russian economic “collapse” will bring Putin to peace talks, according to Treasury Secretary Scott Bessent. Ukrainian President Volodymyr Zelenskiy spoke with Macron after a massive Russian air attack that included a strike on the main government building in Kyiv.

Japan’s ruling party faces a tough decision over its future as it searches for a new leader to replace outgoing Prime Minister Shigeru Ishiba, halt a slide in voter support and reassure investors. The top two contenders are Sanae Takaichi — a darling of the Liberal Democratic Party’s right-wing who favors fiscal stimulus and hawkish diplomacy — and Shinjiro Koizumi, the son of a famous reformist premier, who could push a more liberal social identity.

Sanae Takaichi. Photographer: Toru Hanai/Bloomberg

China said President Xi Jinping will deliver “an important speech” at a virtual BRICS summit convened by Brazil to discuss US trade policy. Indian Prime Minister Narendra Modi plans to skip the meeting as New Delhi proceeds with caution after US President Donald Trump appeared to soften his tone following weeks of tensions between the two nations over trade tariffs and purchases of Russian oil.

Trump said Hamas needs to accept his terms to end its war with Israel in Gaza, making what he called his “last warning” in a social-media post yesterday. International concern is rising about the fate of Palestinian civilians suffering from mass displacement and severe food shortages that the United Nations designates as famine in some areas. Israeli police and medics said five people were killed today in a gun attack on a bus in Jerusalem and at least 12 others wounded.

A displaced Palestinian woman with her belongings. Photographer: Eyad Baba/AFP/Getty Images

South Korea’s biggest conglomerates are racing to contain fallout from a US immigration raid at a Hyundai battery venture in Georgia, a move that threatens to disrupt the electric-vehicle supply chain and put billions of dollars in planned investments at risk.

The US is proposing annual approvals for exports of chipmaking supplies to Samsung and SK Hynix factories in China, a compromise aimed at preventing disruptions to the global electronics industry after Trump officials revoked Biden-era waivers.

China sanctioned a Japanese lawmaker for the first time, accusing him of interfering in Beijing’s internal affairs and undermining its sovereignty, a move that may inflame ties with the government in Tokyo.

New Thai Prime Minister Anutin Charnvirakul’s key cabinet choices may be seen as a reassuring signal by investors who have long been frustrated by the nation’s frequent bouts of political turmoil.

Anutin at a news conference in Bangkok yesterday. Photographer: Dario Pignatelli/Bloomberg

Sign up for the Washington Edition newsletter for news from the US capital and watch Balance of Power at 1 and 5 p.m. ET weekdays on Bloomberg Television.

Chart of the Day

The global market for liquefied natural gas faces a multiyear supply glut starting in 2026, potentially pushing prices to the lowest since the energy crisis triggered by Russia’s full-scale invasion of Ukraine. After four years of tight markets, the International Energy Agency expects the biggest boost in LNG production next year since 2019. Gluts have been predicted before and failed to materialize, but this time looks different because so much new capacity is on the brink of completion.

And Finally

The Norwegian territory of Svalbard is the closest sizeable habitation to the North Pole, and has resources, a commercial airport and ice-free anchorage thanks to the tail end of the Gulf Stream. That makes the archipelago a strategic outpost even before you consider that it lies on potential future sea routes connecting the Atlantic and Pacific Oceans. That growing geopolitical significance is a concern for Norway’s government at a time when Trump says he wants control of Svalbard’s neighbor Greenland, and as fellow Arctic power Russia’s war on Ukraine demonstrates the Kremlin’s willingness to advance its territorial ambitions by force.

Thanks to the 19 people who answered Friday’s quiz question, and congratulations to Gabriel Sivzattian, who was first to correctly identify Jamaica as the country where the prime minister won a rare third term after voters rewarded his administration for reducing debt, unemployment and crime.

Global Must Reads

Chart of the Day

And Finally

More from Bloomberg