Shockwaves from the Middle East

The Middle East is in dangerous and unpredictable new territory. [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. Israeli Prime Minister Benjamin Netanyahu is telling Iran that Israel can “[strike anywhere]( But so can its enemies. Iran’s latest barrage of missiles against Israel was again easily repelled. But [two blasts near Israel’s embassy]( in the outskirts of Copenhagen today show how the Middle East’s spiral into a multi-front war has unknowable ramifications for the entire region and beyond. Few could have foreseen how far the violence would expand when Iran-backed Hamas attacked Israel on Oct. 7 from its base in Gaza, killing 1,200 people and abducting 250 others, followed a day later by Hezbollah firing rockets into northern Israel from Lebanon. Israel’s response, reducing the Palestinian enclave to rubble and [claiming the lives]( of more than 40,000 people, ignited global protests and spurred allegations of war crimes, which Israel denies. Netanyahu has promised to repay in kind yesterday’s long-range Iranian missile launches against his country. How such region-rattling reprisals might transpire hinges on targets and timing. Former Prime Minister Naftali Bennett, one of Netanyahu’s most potent rivals, argues it’s the moment for a long-promised strike on Iran’s nuclear sites. The focus now is on whether Iran has lost face, as its firepower appears simply no match for Israel. Questions are also being asked about whether Netanyahu was justified in defying pleas from the US and others for caution, and if escalation — [taking out Hezbollah’s leader]( and a [ground incursion in Lebanon]( — was the right move. Lebanon is practically a failed state. Its government says a million people have been displaced. Meanwhile, Turkey is taking measures within Syria to halt a new surge of refugees and fears an unstoppable flow of people fleeing Iran. Washington seems in a bind too, a month from the US elections. President Joe Biden doesn’t want his legacy to be one of [unprecedented instability]( and is keen to avoid denting Vice President Kamala Harris’ chances of prevailing over Donald Trump. Time will tell, but we’re in dangerous and unpredictable new territory. — [Flavia Krause-Jackson]( WATCH: Iran fired about 200 ballistic missiles at Israel yesterday. Paul Wallace and Dan Williams report. Source: Bloomberg TV Global Must Reads A Ukrainian outpost on the eastern front line fell to Russian troops, according to the DeepState map service that’s maintained in cooperation with the Defense Ministry in Kyiv. Vuhledar, a strategically located coal-mining town that Russia has tried to take since early 2022, [was seized]( as Ukrainian President Volodymyr Zelenskiy makes increasingly urgent pleas to Western allies for weapons to repel a gradual advance by Kremlin forces. Vuhledar in August. Photographer: Gaelle Girbes/Getty Images Michel Barnier’s first policy address yesterday bought the new French prime minister some much-needed time to fix the nation’s finances, while [avoiding a major rebuke]( from investors. Barnier, whose centrist coalition doesn’t have a parliamentary majority, said he would delay bringing the budget deficit within 3% of economic output until 2029, and outlined plans for a combination of spending cuts and tax hikes on the wealthy and large companies. Republican vice presidential candidate JD Vance came across as the more self-assured in the debate yesterday with his Democratic counterpart Tim Walz, whose nerves were on display as they battled over [immigration, abortion, and climate change](. The bout saw the two Midwesterners seek to maintain a personable veneer and policy focus as they delivered punishing attacks on each others’ running mates. Claudia Sheinbaum pledged in her inaugural address as Mexico’s first female president to pursue the efforts of her political mentor, outgoing leader Andres Manuel Lopez Obrador, to improve [the lives of the poor](. She also promised to safeguard foreign investment as she builds on the legacy of a popular predecessor who wasn’t always friendly to business interests. Japan’s new prime minister, Shigeru Ishiba, held his first phone call with Biden and discussed increasing Japanese military spending and how to strengthen their countries’ alliance. A self-declared “[defense nerd]( Ishiba is a strong supporter of the US-Japan alliance but has also raised novel ideas on ways to develop ties, including by building bases for Japan’s military in the US. Malaysia is expanding oil and gas exploration in the disputed South China Sea despite [pressure from Chinese vessels]( in waters where both sides have overlapping claims, the Washington-based Asia Maritime Transparency Initiative said in a report. Crime fears are dominating the run-up to mayoral elections in Brazil, a test for President Luiz Inacio Lula da Silva and the candidates he backs in the Sunday races that will [serve as an early referendum]( on his government. China said its Coast Guard vessels entered the Arctic Ocean for the first time, patrolling the waters jointly with Russian ships on a mission that [underscored the growing cooperation]( between Beijing and Moscow in the region. South Africa will need to expedite reforms that can boost economic growth to sustain investor inflows that have surged since the formation of a coalition government, according to [the world’s largest investment banks](. Washington Dispatch Harris [will travel]( to Georgia today to tour areas devastated by Hurricane Helene. In coming days, sources say she also plans to visit North Carolina, another state in the ferocious storm’s destructive path. The trips come as White House officials confront both [domestic]( and [international]( crises about a month before the election and as early voting has already begun in some states. Damage caused by Hurricane Helene in Marshall, North Carolina, on Monday. Photographer: Jabin Botsford/The Washington Post/Getty Images In an indication of how significantly events could impact such a close presidential race, Trump quickly accused Harris and Biden of failing to prevent Iran’s latest strike on Israel, mismanaging the Helene recovery efforts and asserting, without evidence, that the Middle East conflict would not have happened had he still been president. One thing to watch today: The ADP employment report for September, the first since the Federal Reserve began lowering interest rates, is expected to show US companies increased the pace of hiring compared with the previous month. [Sign up for the Washington Edition newsletter]( for more from the US capital and watch Balance of Power at 1 and 5 p.m. ET weekdays on Bloomberg Television. Chart of the Day Europe’s coming winter is [forecast to be colder]( than last year, as a weakened La Niña finally arrives, but it will still be warmer than longer-term averages. A series of mild winters have helped the continent ride out an energy crisis as it transitions away from dependence on Russian gas. Cold snaps could still put pressure on the region’s power grids, with La Niña typically bringing lower temperatures. And Finally As one of Europe’s biggest corn exporters, Romania is among countries battling changes to climate patterns that are wreaking havoc on farming. With a price tag the government puts at €5.5 billion ($6.1 billion), the 191-kilometer (119-mile) canal linking the Siret river to the country’s fertile Baragan plain is part of a mission to rescue crops and protect an agricultural industry that’s [critical to the domestic economy]( and the region’s supply chain. A man fishes beside a destroyed pump that once extracted water for irrigation. Photographer: Petrut Calinescu/Panos Pictures/Redux More from Bloomberg - [Next China]( for dispatches from Beijing on where China stands now — and where it’s going next - Check out our [Bloomberg Investigates]( film series about untold stories and unraveled mysteries - [Next Africa]( a twice-weekly newsletter on where the continent stands now — and where it’s headed - [Economics Daily]( for what the changing landscape means for policymakers, investors and you - [Green Daily]( for the latest in climate news, zero-emission tech and green finance - Explore more newsletters at [Bloomberg.com](. Follow Us Stay updated by saving our new email address Our email address is changing, which means you’ll be receiving this newsletter from noreply@news.bloomberg.com. 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