Limits to unorthodoxy

Even as Giorgia Meloni was delivering her victory speech in Rome, investors on the other side of the world were issuing a warning.While trad [View in browser]( [Bloomberg]( Follow Us [Get the newsletter]( Even as Giorgia Meloni was delivering her victory speech in Rome, investors on the other side of the world were issuing a warning. While traders in Asian hours shrugged off the Italian election result as widely predicted, they savaged the UK’s currency and bonds. Key reading: - [Traders More Worried by Liz Truss Than a Far-Right Win in Italy]( - [Far-Right Meloni Strikes Moderate Tone After Italy Election Win]( - [UK Market Selloff Slams Gilts, Pound, Piling Pressure on BOE]( - [Meloni Wins Big in Italian Election to Turn Page on Draghi Era]( - [UK’s Truss Takes Charge of a Nation Adrift and in Mourning]( Meloni secured a majority in yesterday’s vote, putting her in pole position to head the country’s most right-wing government of modern times. She would also become Italy’s first female prime minister. Given their campaign platforms, the alliance of her nationalist Brothers of Italy party, Matteo Salvini’s League and Silvio Berlusconi’s Forza Italia is likely to rail against immigration and lock horns with the European Union. The three-week-old government of UK Prime Minister Liz Truss is a different beast to Meloni’s coalition, but it shares a populist, right-wing bent coupled with a disregard for economic orthodoxy. Its determination to pursue economic growth at all costs was a gamble too far for many investors who sent bond yields soaring and the pound tumbling to an all-time low, raising the prospect of emergency intervention by the Bank of England. The British meltdown is a reminder to Meloni of the dangers of second-guessing markets at a time of overlapping crises. For Italy, that rules out adding to its debt mountain, or doing anything that calls into question its access to some 200 billion euros ($193 billion) of EU pandemic aid. Just ask Berlusconi, for many the original populist, who was forced out as premier in 2011 when government borrowing costs surged during the euro-area debt crisis. Still, if there is one comfort for Meloni, it may be this: When it comes to radicalism, as far as markets are concerned Brexit Britain beats Italy hands down. — [Alan Crawford]( Meloni reacts to the election results in Rome. Photographer: Alessia Pierdomenico/Bloomberg UK politics are entering a new era. Get the latest in your inbox with [The Readout]( from Allegra Stratton. And if you’re enjoying this newsletter, click [here]( to sign up for Balance of Power. Global Headlines Draft tensions | President Vladimir Putin’s partial [mobilization]( order has triggered sporadic protests throughout Russia. Ukrainian President Volodymyr Zelenskiy called on Russians to flee or surrender, saying it would help end the “criminal war” sooner. Meanwhile, the Kremlin may rush to announce the annexation of four occupied regions of Ukraine as early as this week. - Russians [flooded]( to the border as speculation grew that the Kremlin may bar draft-eligible men from leaving the country. - President Joe Biden’s administration has privately told Moscow that any use of [nuclear weapons]( in its war in Ukraine would have “catastrophic consequences” for Russia, National Security Adviser Jake Sullivan said. Police officers block a street in St. Petersburg on Saturday following calls to protest against the military mobilization. Source: AFP/Getty Images Core leader | China’s Communist Party emphasized that President Xi Jinping remains at the core of its leadership as it published a list of delegates invited to attend next month’s landmark twice-a-decade congress. The announcement of the list brings Xi another step closer to [clinching]( a precedent-defying third term in power at the pivotal event, which begins Oct. 16 in Beijing. - Global financial firms, which suffered multi-billion dollar losses in Russia, are now [reassessing]( the risks of doing business in Greater China after an escalation of tensions over Taiwan. China is on the front line of an unfolding international [debt crisis]( after becoming the largest government creditor to developing countries during the past decade. After building railways, dams, and power plants from Peru to Pakistan, China’s “Belt and Road” initiative has entered a new, hazardous chapter, as soaring energy prices and rising interest rates have crippled the ability of some nations to service their loans. Crackdown slammed | Iran’s repression of protests over the death of a young woman arrested by the morality police for violating the Islamic Republic’s dress code prompted the top EU foreign envoy to [condemn]( a “widespread and disproportionate use of force.” The unrest, now in its 10th day, has spread to scores of towns and cities, with 41 people killed and hundreds arrested. Best of Bloomberg Opinion - [Investors Tell Liz Truss That She’s Not Trusted: Editorial]( - [Republicans Especially Owe Venezuelan Migrants: Matthew Yglesias]( - [The Lessons From the Third Energy Crisis: David Fickling]( Court clashes | The US Supreme Court justices, who jolted the political landscape by striking down the constitutional right to abortion, return for their next term on Oct. 3 with an [ambitious agenda](. And as [Greg Stohr]( reports, by all appearances it’s destined to fulfill more conservative wish-list items that will exacerbate the nation’s political and cultural divides. Explainers you can use - [Solar Outshines Wind to Lead China’s Clean-Energy Transition]( - [Oil Tumbles as ‘Wrecking Ball’ Dollar Piles On Commodity Losses]( - [Crisis Level Risks Loom in Asia as Major Currencies Crack]( War effect | The world as a whole has been jolted by the war in Ukraine, according to the OECD, which cut almost all economic-growth forecasts for the Group of 20 next year while anticipating further interest-rate hikes. The outlook provides a snapshot of the [synchronized shock]( stemming from Russia’s invasion and the energy crunch that has inflicted a widespread cost-of-living crisis. Bloomberg TV and Radio air Balance of Power with [David Westin]( weekdays from 12 to 1pm ET, with a second hour on Bloomberg Radio from 1 to 2pm ET. You can watch and listen on Bloomberg channels and online [here]( or check out prior episodes and guest clips [here](. News to Note - Hong Kong’s dismantling of hotel quarantine for arrivals is being met by calls for the city to [remove]( remaining Covid travel restrictions. - Emmanuel Macron’s government will present a budget today that aims to renew the French president’s [fiscal credibility]( despite extra spending to cushion energy price shocks and an emboldened opposition. - German Chancellor Olaf Scholz secured just [one shipment]( of liquefied natural gas from the United Arab Emirates, with a non-binding agreement for more, during a Middle East visit. - The main Czech opposition group won in most large cities in municipal elections, mobilizing [protest votes]( against the government’s handling of the energy crisis. - Mozambican President Filipe Nyusi was elected [unopposed]( to a third five-year term as leader of the ruling Frelimo party, even as his tenure as head of state ends in 2024. - A majority of US Democrats and Democrat-leaning independents want the party to [replace Biden]( as its 2024 nominee, according to a Washington Post-ABC News poll. Thanks to the 24 people who answered the Friday quiz and congratulations to Enrico Pivirotto, who was the first to name South African President Cyril Ramaphosa as the leader who cut short a foreign trip to return home as his country faced an unprecedented level of power blackouts. And finally ... In New York’s midtown Manhattan lies a multibillion-dollar problem for building owners as [decades-old]( office towers sit partially empty. They’re too outdated to attract tenants seeking the latest amenities and too new to be demolished or converted for another purpose. It’s a situation playing out around the globe as employers adapt to flexible working after the Covid-19 pandemic, with vacancy rates soaring from Hong Kong to London and Toronto. Office buildings in New York. Photographer: Amir Hamja/Bloomberg Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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