Today, when looking at a few news items together, the main thread is clear: while geopolitical tensions are escalating, funds are not flocking en masse to safe-haven assets. Instead, they are beginning to differentiate between who can benefit from higher interest rates and strong demand for safety versus who will face liquidity withdrawal. ETF Radar is following this line today.

First and foremost, the conflict itself has added another layer of tension.

The two most critical points today are the updated assessment of the Russian battlefield and continued special reports on Iran. N1 notes that the Kremlin is adjusting its narrative, due to the Trump administration's recent denial of Russia's negotiation strategy and acknowledgment of some successes by Ukraine in the battlefield. In plain terms, this does not smell like a quick resolution but rather indicates ongoing negotiations with both sides still pulling their weight. N2 also mentions that ISW and CTP are continuing daily updates on the Iranian situation, indicating that Middle Eastern risks have not passed.

[未翻译/untranslated] 这为什么重要？因为一旦战争和制裁预期拉长，市场最先想到的不是“明天就出结果”，而是“安全、能源、运输、融资成本，会不会都变贵”。想象一下，企业原本在平静天气里开船，现在海上起风了。船不是立刻沉，但保险费、油费、绕路成本，都会先涨。

Secondly, this uncertainty would then hit interest rates.

N4 provided a crucial data point, the difference between U.S. 10-year and 2-year Treasury yields, or T10Y2Y, which is now at 0.38. In plain terms, this represents 'which rate is higher, long-term or short-term.' Currently positive, it means that long-term rates are slightly higher than short-term rates, indicating that the market no longer strongly bets on an abrupt economic U-turn. Put more simply, the market hasn't made a quick rate cut its primary scenario yet.

This forms a common feedback loop: conflicts increase uncertainty, putting upward pressure on energy and transportation costs, making it harder for inflation to come down completely; with inflation not coming down, the Fed is reluctant to lower interest rates easily; high interest rates keep borrowing costs elevated. With borrowing costs high, it’s often not the cash-flow-stable large companies that suffer the most, but rather high-valued sectors, firms that expand through financing, and assets that are very sensitive to interest rates.

Step three, this global risk sentiment has left clear traces in other markets as well.

N3 noted that the three major indices of A fell collectively, with the dropping over 4%. Semiconductors and CPO led the decline, with companies like and falling more than 8%. N7 added that the turnover in the Shanghai and Shenzhen stock markets exceeded 3 trillion yuan, an increase of over 430 billion yuan compared to the previous trading day at this time. This combination is interesting: on one hand, there was a significant drop, while on the other hand, there was massive trading volume. In plain terms, it means 'many people are active and there is great disagreement.' Some are rushing in ahead of others, but overall, high-volatility sectors took the brunt of the fall.

This aligns with the previous chain of logic. Overvalued, growth-oriented sectors priced on future narratives are most sensitive to interest rates. With higher rates, it's as if the discount on future money is even more severe, making valuations naturally more prone to contraction. The reaction of China's and semiconductors today is, to some extent, an amplified version of how such assets respond to high interest rates and cooling risk.

However, there is an exception: CRO and satellite navigation in N3 performed even better. This indicates that the market is not 'throwing everything out', but rather changing direction. Satellite navigation, which leans towards defense and security, tends to benefit from geopolitical risk premiums. In plain terms, when situations become more chaotic, investors are willing to price 'security-related' assets higher.

Step four is to look at the crypto market, which also provided a supplementary signal today.

N8 noted that the US spot Bitcoin ETF experienced another net outflow of $95 million, while the Ethereum ETF also saw an outflow of approximately $52 million, ending five consecutive days of inflows. N9 also mentioned that while oil prices rose for three straight days amid heightened tensions between the US and Iran, gold fell for four consecutive days, whereas Bitcoin remained relatively stable.

[未翻译/untranslated] 这组新闻挺值得玩味。按老剧本，局势紧张时，黄金应该更像避风港。但现在黄金在跌，加密也没接住持续流入。白话讲，市场的避险方式并不统一，甚至有点“谁都不完全信”。这通常意味着，资金更在意真实利率和美元环境，而不只是 headline，也就是新闻标题本身。

Moving on to ETFs. It's important to note that the ETFs selected by ETF Radar may have a direct connection to today's main theme, or they may not be directly related. In either case, we will address them separately without forcing a connection where it doesn't exist.

Now for ITA. The ETF Radar model is slightly positive towards ITA, with signals that are fairly consistent and directly relevant to today’s main theme. Simply put, ITA is the US Defense and Aerospace ETF, and the longer the conflict persists, the greater the for defense budgets and military orders.

[未翻译/untranslated] 量化上有三条证据。第一，7/8 报告净创设约 +$766M，近 20 天流入约 $765M。净创设，白话讲，就是基金份额被新增出来，说明真有钱在往里进。第二，历史冲突升级事件中，ITA 平均 t+20 约 +4.5% 到 +5.6%，样本大约 24 次，up_rate 约 1.0。t+20，白话讲，就是往后看 20 个交易日；up_rate 约 1.0，就是这些样本里多数时候方向偏同一边。第三，arc 窗口里 ITA +11.26%，SPY +3.86%，excess +7.40%。excess 的白话解释，就是“比大盘多涨了 7.40%”。不过也要诚实说，短期 2 天它反而比 SPY 少了 1.45%，说明获利了结还在，短线不会一路直上。

Second, IEF. ETF Radar is negative on IEF, with multiple pieces of evidence pointing in the same direction, which aligns with today’s main theme. IEF is an ETF for 7 to 10 year U.S. Treasury bonds. The term duration, in plain terms, refers to how sensitive a bond is to changes in interest rates; the longer the duration, the more likely the price will drop if rates rise.

The quantitative evidence is strong. First, the COT still shows a net short of approximately -1.97M on 10-year Treasuries. COT refers to the Commitment of Traders report in futures markets, where a net short indicates that those betting on a decline outnumber those betting on an increase significantly. Second, the U.S. 10-year yield is around 4.56%. With yields rising, bond prices typically face pressure, reflecting an inverse relationship. Third, IEF was -0.67% over this window period, while SPY gained +1.89%, meaning it underperformed the broader market by approximately 2.56%. It is important to note a divergence: geopolitical conflicts should theoretically lead to safe-haven bond buying, but the system readings did not follow this short-term scenario because the real-time market reaction suggests rates are still high and large trader positions have not shifted. In other words, news tends to be short-term focused, while the system stance is more medium-term oriented, and this divergence itself serves as a hint.

Thirdly, look at XLF. ETF Radar shows a slightly positive bias for XLF with concentrated evidence. It is indirectly related to today’s main theme: banks could benefit from 'higher rates for longer' if rate cuts are further delayed due to conflicts and inflation.

Quantitatively, first, the US 10-year yield is around 4.49%, with T10Y-2Y at approximately +0.31. This positive spread means that long-term rates are slightly higher than short-term rates, which typically makes it more comfortable for banks to engage in lending activities. Second, NFCI is around -0.504. The NFCI is a financial conditions index, meaning it reflects the overall tightness of market borrowing and financing; a negative number indicates that conditions are not particularly tight yet. Third, within the arc window, XLF has risen by 7.66%, SPY by 3.86%, with excess gains at 3.80%, indicating outperformance relative to the broader market by 3.80%. However, it is worth noting a counterpoint: XLF experienced net outflows of -3.87% AUM over the past day. AUM refers to the total fund size, and net outflows suggest that short-term funds are taking profits, not all investors are continuing to chase the trend.

Fourth, BLOK. This is not directly related to today's main theme and represents an independent medium-term stance by ETF Radar. The model readings point to a relatively strong negative signal for BLOK. BLOK is an ETF of crypto-themed stocks, not holding Bitcoin directly but rather stocks related to blockchain, mining companies, and trading platforms.

Its quantitative evidence primarily comes from the capital flows. First, there was a net outflow of approximately -$4.5bn cumulatively in June. Second, there was a weekly net outflow of -$1.79bn as of 6/26. Third, the largest single-day withdrawal was -$444.51m. In plain terms, capital outflows mean money is leaving. Additionally, within the arc window, BLOK gained +0.51%, while SPY gained +1.45%, meaning it underperformed the broader market by 0.94% and thus remained relatively weak. Today's outflow from the N8 Bitcoin ETF aligns with its mid-term stance, but to be honest, in segment A, ARKB and BITO’s systematic positions were less bearish, indicating some divergence: short-term fluctuations in currency ETFs and mid-term pressures on crypto stock ETFs are not necessarily synchronized.

In conclusion, with tensions not subsiding and high interest rate expectations persisting, the market is increasingly picking winners and losers rather than taking broad bets. Again, please note that the above direction prediction for general markets is based on a system quantitative model and does not constitute personalized investment advice; consult a licensed investment advisor before investing.