* Huge crowds flood Tehran's streets for slain ayatollah's funeral procession
The Islamic Republic of Iran is staging a week of mass funeral ceremonies for slain leader Ayatollah Ali Khamenei, who was killed alongside several members of his family in an airstrike shortly after war was declared by the United States and Israel on February 28.
While Iranian President Masoud Pezeshkian was seen walking with mourners on the streets of Tehran, so far there have been no public sightings of Mojtaba Khamenei, the son who succeeded Khamenei and was injured in the attack that killed his father.
* ESM sees elevated euro zone recession risk arising from Middle East tension, potential U.S. asset selloff
A renewed Middle East conflict and a U.S. asset selloff are the two biggest risks to the euro zone, which, if twinned, could tip the euro area into recession and send inflation up near 5%, according to the European Stability Mechanism.
The Iran war and the energy crisis stoked by closure of the Strait of Hormuz, a vital shipping lane, have had a major impact on the global economy and rattled financial markets.
"Rising political uncertainty, longer-run fiscal sustainability concerns, and stretched equity valuations built on artificial intelligence-related earnings expectations create the potential for a sudden asset price correction emanating from the U.S.," ESM's report said.
* China test fires a missile into Pacific , alarming regional powers
China's military test-fired a missile from a nuclear-powered submarine into the Pacific, according to the official Xinhua news agency, a move which drew sharp criticism from Japan, Australia, New Zealand and Taiwan.
Xinhua did not specify what type of missile China launched, but state-controlled tabloid Global Times, citing a military expert, said it was likely to have been the JL-3, China's most advanced submarine-launched missile, which debuted at a military parade last year.
The JL-3 is capable of reaching the continental United States from Chinese coastal waters, according to a report from the Pentagon.
