What’s most worth watching today is not a single isolated piece of news. It’s several new items that happen to line up: a steadier foreign-exchange market, regulator comments to stabilize things, a big rally in A-share semiconductors, while on the other side the Middle East conflict continues to add pressure to energy markets. ETF Radar sees this as risk appetite being repaired on one hand, while geopolitical risk premium is being retained on the other.

First, look at China’s main thread. The State Administration of Foreign Exchange most recently said that in the first half of the year banks’ foreign-exchange settlement and sales totaled 2.9 trillion USD, a year-on-year increase of 24%. At the same time, banks’ net surplus from foreign-exchange settlements and sales was 18731 hundred million RMB. In plain terms, corporate and household foreign-exchange inflows and outflows are both very active, and inflows exceed outflows, so the FX market hasn’t been rattled by geopolitical swings.

Why does this matter? Because a steady FX market is like a large reservoir with a more stable water level. Corporate currency conversion, cross-border receipts and payments, and foreign-capital flows are less likely to cause a sudden “drain.” To put it plainly, the market fears disorder more than slowness. This data at least shows that funding flows are still moving and that exchange-rate and cross-border liquidity pressure have not spiraled out of control.

At the same time, the China Securities Regulatory Commission over the weekend explicitly stated it will spare no effort to maintain stable market operations, and it mentioned improving listed companies’ transparency and veracity to better reward investors. Plainly put, this is not direct cash support or an immediate earnings boost, but it signals to the market: volatility is acceptable, disorder is not.

Taken together, these two items convey a clear transmission. A steadier FX market first steadies sentiment around the large pool of capital; regulator comments then act as a backstop, further reducing worries that “if something happens, no one will step in.” So risk appetite — whether investors are willing to touch more volatile assets — will begin to recover. To use an analogy: if the road is no longer slippery, drivers naturally feel safer to press the accelerator a bit.

Next, all three major A-share indices closed higher today. The Shanghai Composite rose 1.79%, the Shenzhen Component rose 4.81%, and the ChiNext Index rose 7.05%. The brightest spots were semiconductors, communications equipment, and computer hardware; for example, Huahong Hongli, Dongwei Semiconductor, and Liantech hit their daily limit-up, and Jiangbolong rose over 12%. This was not a single heavyweight stock pulling the market; rather, growth- and tech-oriented sectors were active together.

Why did semiconductors surge first? Because the funding-sentiment chain mentioned earlier most easily transmits to the most elastic sectors. Semiconductors are effectively the engine of tech stocks; once the market senses external funding pressure is less severe and policy doesn’t want the market to look too bad, capital often first seeks out high-elasticity areas to test the waters.

But there’s a very real contrast today. Within A-shares, oil & gas, banks, and coal were among the larger decliners: Taishan Petroleum fell more than 6%, Lu’an Huaneng fell over 4%, and Bank of China fell over 3%. That indicates the market is not signaling “widespread risk aversion” but rather “risk appetite is recovering.” In other words, money shifted from the more defensive sectors into tech and growth.

However, this repair in risk appetite does not erase global geopolitical risk. On the other side, daily assessments of the Middle East conflict continue to update, showing that Iran-related clashes have not quieted. Plainly put, capital markets can chase tech today, but questions remain about whether tankers will reroute and whether oil supply will be disrupted. That produces a typical picture: some equity money returns to growth, while an energy risk premium remains. Risk premium, put simply, is the extra “insurance cost” investors are willing to pay for the same oil when they worry something might happen.

Add a macro backdrop. The US 10-year and 2-year Treasury spread is currently 0.39. This indicator, in plain terms, is the difference between long- and short-term interest rates. Because it is positive, the yield curve is not deeply inverted. For general audiences, a useful takeaway is: the market has not yet reached the extreme panic stage that would suggest an imminent hard landing. It doesn’t directly tell you direction, but it affects how people view future growth and rates.

So stringing today’s items together, the main line is clear. First, FX data show funding conditions and cross-border flows remain stable. Second, regulator comments further stabilize sentiment. Third, capital first flows into the most elastic part of the A-share market — semiconductors. But fourth, the Iran conflict keeps the energy thread alive. Thus the market is not a single narrative but a coexistence of “tech repair” and “energy premium.”

Next, a few ETFs most relevant to this main line.

First look at FXI. FXI actually rose 4.78% over the past 5 trading days, i.e., roughly the past week, and the ETF Radar model is mildly positive on FXI for the next 1 to 3 months, with reasonably consistent signals. The first supporting read is net cross-border inflows into the non-bank sector in the first half of the year of about 2472 hundred million USD — in plain terms, more money came in cross-border than flowed out. The second supporting read is a banks’ net settlement and sales surplus of about 2712 hundred million USD — in plain terms, the currency-conversion link was also a net inflow overall. The third supporting read is that FXI cumulatively rose 5.23% in this thematic window, with excess return versus EEM of 15.44%. Excess return, plainly put, means FXI outperformed the peer emerging-market large-cap by 15.44%. This aligns with today’s main thread: steadier FX, less cross-border funding pressure, and large-cap weighted stocks are easier to benefit first. Also, on the tape FXI rose 4.13% over the past 20 trading days, which supports this medium-term view. But to be honest, FXI had net outflows of -8.31% AUM in the most recent day. AUM is the fund’s total assets under management. Plainly put, single-day redemptions were sizable, so even if medium-term reads are positive, the short term may not be a straight line up.

Second, look at KWEB. KWEB is highly related to today’s main thread because it tilts more toward China internet platforms. The exact 5-day return for KWEB was not separately provided in the input, so here we can only use mid-term quantitative evidence; there is no independent 5-day quantitative confirmation this time. Looking ahead, ETF Radar leans mildly positive on KWEB for the next 1 to 3 months, but the signal is somewhat mixed. Why mixed? Because both positive and negative evidence coexist. On the positive side, KWEB cumulatively rose 8.72% in the thematic window, with excess return versus FXI of 3.49% — in plain terms, it outperformed China large-cap by another margin. On the options side, put/call vol is about 0.71. Option volatility, in plain terms, can be understood as the market’s pricing for insurance against moves up or down; this ratio is relatively low, indicating the bullish side is more crowded. Combined with today’s FX and regulator news, this can indeed help platform stocks’ valuation repair. On the negative side, KWEB saw net fund outflows of about -1340 ten-thousand USD across the past 5 and 20 days combined, and the most recent day also had net outflows of -0.25% AUM. Plainly put, prices were strong but money did not flow in consistently. So this type of ETF reads as “biased positive but still needs watching,” not a one-sided call.

Third, look at SMH. SMH actually fell 5.32% over the past 5 trading days. To be clear, this is already occurred price action. As for the outlook, the ETF Radar model is mildly positive on SMH for the next 1 to 3 months, with reasonably consistent signals. Why is the model positive despite last week’s drop? Because the model looks at the next 1 to 3 months, not just recent daily moves. Quantitative reads supporting SMH: first, ByteDance is reportedly negotiating about 200 hundred million USD in borrowing to expand AI spending — in plain terms, downstream customers are still spending real money on compute. Second, Zhipu raised 40 hundred million USD via a placement, indicating financing in the AI supply chain has not stopped. Third, ASML issued 2026 revenue guidance of 430 to 450 hundred-million EUR, meaning upstream equipment suppliers themselves are signaling healthy demand expectations. This is related to today’s A-share semiconductor burst: if global AI compute investment continues and sentiment stabilizes, semiconductors are likely to be a leading rebound area. That said, SMH’s near-term price has fallen over the past 5 and 20 trading days, showing the medium-term logic has not fully fed into the short-term price.

Fourth, look at XLE. XLE actually rose 1.66% over the past 5 trading days, and the ETF Radar model is mildly positive on XLE for the next 1 to 3 months, with reasonably consistent signals. This ETF directly ties to today’s theme that the Iran conflict is still escalating. Quantitatively, first, US crude inventories were confirmed to have fallen to around 7.26 hundred million barrels near July 10. Inventory declines, plainly put, mean stored oil is shrinking. Second, crude oil COT net short positions tightened from about -23666 to -15417. COT net positions, in plain terms, are the difference between large speculators betting down versus up; net-short shrinking means bearish bets have eased. Third, the prediction market assigns roughly a 72% probability to a supply shock exceeding 1000 ten-thousand barrels per day. Prediction markets, plainly put, are many people putting real money on whether an event will happen, and this probability can be treated as a market thermometer. Also, option-implied volatility has risen to roughly 26 to 34; implied vol, plainly put, means the market expects larger future swings. Note one divergence: today A-share oil & gas stocks fell, but XLE’s medium-term read is still positive. The reasons do not conflict. A-shares reflect a rotation toward risk-on and tech; XLE reflects a 1-to-3-month view of global energy supply risk. Both can exist simultaneously. The news is fresh, and the system’s stance is medium-term; divergence itself is a signal.

If you capture only one sentence today, it is this: China’s new items are pushing “sentiment repair” toward tech and platforms; Middle East news keeps the insurance premium on energy suspended in the air. ETF Radar sees not a single-choice scenario but two parallel lines. A reminder again: the above are ETF Radar system quantitative model directional forecasts for general market conditions and do not constitute personalized investment advice; consult a licensed investment advisor before investing.