France’s far-right RN leads election first round

Good morning. Here's what happened overnight and what you need to know today.

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1.

Le Pen lead: Marine Le Pen's National Rally (RN) party led the first round of France's parliamentary elections, according to exit polls cited by Reuters, dealing a blow to President Emmanuel Macron and putting the far-right on track to power for the first time in modern history. Nearly 60% of voters had cast ballots by 5pm local time, the highest turnout since 1986. RN had secured around 34% of the vote, according to exit polls from Ipsos, Ifop, OpinionWay and Elabe, the news agency said. That put them ahead of Macron's Ensemble alliance, which was projected to win 20.5% to 23% of the vote, and the leftwing New Popular Front (NFP) with 29%. The final result will hinge on a week of political negotiations before the 7 July runoff, where parties will strategise across France's 577 constituencies. If RN wins an outright majority, Macron could be forced into an uncomfortable power-sharing arrangement known as “cohabitation,” with Le Pen’s 28-year-old protégé, Jordan Bardella, as prime minister. That would shake the EU as the eurosceptic and anti-immigrant party would likely challenge bloc’s policies and Macron's pro-EU stance. (Reuters)(Financial Times)

2.

Labor drama: Prime Minister Anthony Albanese indefinitely suspended Senator Fatima Payman from Labor's caucus following her appearance on ABC’s Insiders on Sunday, where she vowed to cross the floor again over the Gaza crisis. Payman, Australia's youngest senator and first to wear a hijab, had previously defied party rules by voting for a Greens motion to recognise Palestine on Tuesday, which typically results in expulsion. Albanese initially responded with a light touch but reversed course after Sunday’s interview. Supported by Deputy Prime Minister Richard Marles and Foreign Minister Penny Wong, the Prime Minister met Payman at the Lodge to tell her that she was suspended from the caucus indefinitely until she vowed to abide by caucus rules. Payman, however, remains defiant, refusing to resign and claiming support from Labor's rank-and-file members. Her actions have highlighted deep divisions within the party over the Gaza conflict and sparked significant debate about party discipline and representation of diverse views. (Capital Brief)

3.

Debate aftermath: Joe Biden and his top allies launched an intense damage-control effort over the weekend to reassure Democratic donors after a troubling debate performance. At a high-profile fundraiser in East Hampton on Saturday, the US President admitted, “I didn’t have a great night,” but vowed to press forward amid a previous uptick in polls. Senior Democrats contacted donors to bolster confidence and backers, such as former President Barack Obama, former President Bill Clinton and former House Speaker Nancy Pelosi, made public statements of support. Others were more cautious, contemplating alternative candidates as a CBS News-YouGov poll released Sunday showed nearly three-quarters of US voters think he should end his re-election campaign following his debate performance. The influential New York Times editorial board and the Atlanta Journal Constitution editorial board, both called for Biden to step aside, adding to the pressure. Meanwhile, high-profile donors, such as LinkedIn founder Reid Hoffman, continued to support Biden, stressing the high stakes of the election, as grassroots donations since the debate reached a record USD27 million, according to campaign officials. (New York Times)(Financial Times)

4.

Iran’s runoff: Iran will hold a runoff presidential election on 5 July, after no candidate secured the required 50% plus one vote in the first round on Friday. The run-off will see moderate lawmaker Massoud Pezeshkian, who lead with over 10 million votes, compete against Saeed Jalili, a former Revolutionary Guards member, who garnered over 9.4 million votes, according to the interior ministry. Turnout was historically low at around 40%. The election follows the death of President Ebrahim Raisi in a helicopter crash, coming amid rising regional tensions due to the war between Israel and Iranian allies Hamas in Gaza and Hezbollah in Lebanon, and increased Western pressure over Iran's nuclear programme. Pezeshkian, supported by sidelined reformists, might help ease Western tensions, while Jalili’s win could intensify Iran's antagonistic policies. The new president is expected to be closely involved in choosing a successor to the ageing Supreme Leader Ayatollah Ali Khamenei. (Reuters)

5.

China chill: China's factory activity contracted for the second month in June, highlighting ongoing economic challenges from its real estate sector downturn. The National Bureau of Statistics reported the manufacturing purchasing managers index (PMI) remained at 49.5, below the expansion threshold of 50, but in line with expectations from economists polled by Bloomberg. The non-manufacturing PMI, covering construction and services, dropped to 50.5 from 51.1 in May. Weakened domestic and international demand contributed to stagnant factory orders and export levels. The construction sector hit its lowest activity since July 2023, suggesting state infrastructure spending lost momentum amid heavy rainfalls in southern China. Trade tensions with the US and EU have added pressure to the economy, which the government aims to grow by 5% this year. (The Wall Street Journal)(Bloomberg)

6.

Israel-Hamas war: Israeli forces intensified their operations in Gaza on Sunday, advancing into the Shejaia neighbourhood in the north and deeper into Rafah in the south, killing at least six Palestinians and destroying several homes, Reuters reported. The Israeli military reported killing several Palestinian gunmen in Shejaia, finding military infrastructure in a UN school, and discovering a "terrorist war room" in a clinic. Israeli Prime Minister Benjamin Netanyahu reiterated the goal of eliminating Hamas, returning hostages and ensuring Gaza poses no future threat to Israel, committing to continue fighting until all objectives are met. Gaza's health ministry warned fuel shortages will shut down all remaining hospitals and health centres within 48 hours. Meanwhile Hezbollah targeted an Israeli command post, and Israel expanded its footprint in the West Bank, further escalating tensions. (Reuters)(The Washington Post)

7.

Billions shift: Berkshire Hathaway chairman Warren Buffett told The Wall Street Journal he doesn’t plan to continue donations to the Bill & Melinda Gates Foundation after he dies. Instead, most of his USD130 billion ($194 billion) fortune is earmarked for a new charitable trust run by his three children. Buffett, who turns 94 in August, has contributed approximately USD43 billion to the Gates Foundation since 2006, including a contribution of USD4 billion in Berkshire Hathaway stock announced on Friday. “The Gates Foundation has no money coming after my death,” Buffett told the journal. He served as a trustee of the foundation until 2021, resigning less than two months after the couple announced their plans to divorce. Buffett’s children, Susie, Howard and Peter must decide unanimously which philanthropic purposes the money will go to serve, according to the report. The new foundation is set to rival the world's largest philanthropies, surpassing the Gates and Ford Foundations. (The Wall Street Journal) (The Financial Times)

8.

Davos scandal: Employees at the World Economic Forum (WEF) in Davos have accused its founder, Klaus Schwab, and leadership of discrimination and harassment against women and Black people, The Wall Street Journal reported on Sunday. Citing internal complaints, email exchanges and unnamed current and former employees, the paper said that under Schwab’s oversight, the organisation behind the annual Davos gathering of world leaders and chief executives “has allowed to fester an atmosphere hostile to women and Black people in its own workplace.” The report said Schwab pushed to lower the average age of the workforce by targeting older employees for dismissal and dismissed a pregnant employee from a leadership role. Schwab himself allegedly made inappropriate and suggestive comments towards at least three different women: a receptionist, a personal assistant and a European staffer. The report also included several examples of discrimination towards Black people ranging from racial slurs to promotion and inclusion issues. In a statement, WEF disputed the allegations, saying the organisation has a zero tolerance for harassment or discrimination. (The Wall Street Journal)