European Central Bank President Christine Lagarde has highlighted the dual uncertainties posed by the Iran war, particularly regarding the duration of the conflict and the potential for energy prices to affect inflation more broadly. These factors complicate the ECB's monetary policy decisions, prompting a need for more data before taking action. Lagarde noted that while energy prices have not risen enough to trigger the ECB's adverse scenario, the situation remains highly unpredictable.

Kevin Warsh, nominated by US President Donald Trump to chair the US Federal Reserve, is set to face a potentially contentious US Senate Banking Committee confirmation hearing. Lawmakers are expected to question Warsh on Fed independence, his views on interest rates, his record as an inflation hawk, and a US Department of Justice investigation into a Fed building renovation project. Warsh's plans for the Fed's balance sheet, his position on financial industry regulations, and his significant personal wealth are also likely to be scrutinized.

China's finance sector grew faster than manufacturing for the first time in years, boosted by a surge in IPOs and stock trading activity. Manufacturing remained solid on strong export demand, while weaker consumer sectors and construction highlighted uneven economic recovery.

Activist investors are ramping up activity in Japan, encouraged by recent wins and ongoing corporate governance reforms. Firms are expanding positions and adopting more assertive strategies, signaling sustained pressure on companies to improve returns and unlock shareholder value.

China's benchmark bonds are poised for their best month since October, with yields on 10-year sovereign bonds dropping to below 1.75%. Abundant liquidity is offsetting concerns about upcoming debt supply, as the government prepares for a record 30-year bond issuance. The People's Bank of China has maintained loose cash conditions to support the economy, keeping overnight borrowing rates near their lowest since 2023.

South Korea's KOSPI stock index rose to a record intraday high above 6,350, driven by strong net buying from foreign and institutional investors. Gains in major stocks offset retail selling, while the KOSDAQ index slipped as foreigners and institutions turned net sellers.

Banks are urging US Consumer Financial Protection Bureau acting Director Russell Vought to maintain supervision of nonbanks, which has been drastically reduced under the bureau's deregulatory agenda. Industry groups have highlighted the risk of fraud and scams due to less oversight of nonbanks.

The US SEC and US CFTC have proposed scaling back hedge fund reporting rules, including raising the filing threshold to $1 billion in assets and exempting smaller advisers. The plan aims to reduce compliance burdens by eliminating duplicative data requirements while maintaining oversight of systemic risks.

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