This is the first trading day of the week, with markets closed over the weekend. First, looking at last Friday's close, US large-cap indexes were slightly strong, SPY up 0.72%, QQQ up 0.65%; if looking at last week, SPY up 1.10%, QQQ up 0.55%, but technology has still been relatively weak over the past month.

The main themes for today: first, China has been repeatedly signaling 'stabilize finance, control risk, secure liquidity'; second, reports that Japan and the United States jointly stepped in to support the yen are beginning to transmit into global interest rate and FX expectations. What ETF Radar sees is not a single headline, but a chain reaction of stable capital, stable exchange rates, and then transmission to bond and equity markets.

Start with the China thread. The most concentrated weekend news was that the People’s Bank of China held its second-half work meeting, explicitly mentioning continued support for resolving debt risks of local government financing platforms, promoting the market-oriented transformation of financing platforms, and enriching the macroprudential and financial stability toolbox. Macroprudential, in plain terms, means not just watching a single bank but monitoring the whole financial system so no cascading risks emerge. Local financing platforms, in plain terms, are the many vehicles localities used to borrow for roads and projects; the current priority is to avoid letting old debt roll into larger pressures.

This news is important not because it immediately brings growth, but because it first provides a floor. To put it bluntly, the market fears not slowness so much as a sudden crisis. The central bank is effectively reducing the probability of a 'blowup' first. As a result, the chains of banks, the bond market, and local credit are easier to stabilize in the short term.

Next, look at the State Administration of Foreign Exchange. The FX authority also met over the weekend, mentioning that in the second half it will steadily expand institutional opening in the foreign exchange area while strengthening supervision, and it specifically mentioned newly issuing a USD 5.3 billion quota to qualified domestic institutional investors. Institutional opening, in plain terms, is not a temporary easing but making cross-border capital inflow and outflow rules clearer and more long-term. The QDII quota, in plain terms, is the allowance for qualified institutions to invest more money overseas.

This connects with the central bank news. First stabilize internal risks, then stabilize external expectations. If there are no major internal problems, external capital is more willing to look at Chinese assets; clearer FX rules also make cross-border trade and financing easier for companies. Imagine a market that fears both debt problems and disorderly capital flows — valuations will struggle to rise. What policymakers are doing now is plugging the two most frightening holes first.

At the same time, there was a very down-to-earth item: multiple large state-owned banks restarted 5-year jumbo certificates of deposit, with annualized rates around 1.60%. This looks like small banking news but actually reflects stability on the liability side. The liability side, in plain terms, is where banks 'borrow money' from depositors. More 5-year products returning means banks want to keep deposits for longer. Put simply, banks want more stable funding rather than short-term money that comes today and leaves tomorrow. It does not necessarily mean the economy suddenly gets better, but it means the financial system is prioritizing stability.

So these three items together form a clear chain: first stabilize local government debt risk, then stabilize cross-border capital expectations, then stabilize banks' funding sources. They point not to 'big stimulus' but to 'stabilize before anything shakes.' For the market, that means risk appetite — whether people are willing to take on more volatility — at least won't continue to be dragged down by the worst-case scenario.

On the other hand, there is a global variable that cannot be ignored: Japan and the United States jointly supporting the yen. Reports say the yen surged sharply over the past two trading days, rising 3.3% at one point on July 30 and rising another 1.32% on July 31, and this is a rare joint intervention in nearly 30 years. Joint intervention, in plain terms, means two governments officially stepping in together to directly influence the exchange rate so it does not spiral out of control.

Why does this matter? Because the yen is not a small currency. If the yen depreciates continuously, global carry trades expand more easily. Carry trades, in plain terms, are borrowing cheap yen to buy other higher-yielding assets. But once officials act, the market worries that this 'cheap funding chain' may not be as stable. Exchange rate expectations change, and global bond and risk asset pricing will tremble accordingly.

Add to that a US long-end bond development: the 30-year US Treasury yield surged to 5.28%, and the yield curve continued to steepen. Yield, in plain terms, is the annual return bonds offer investors; when yields rise, bond prices usually fall. A steepening curve, in plain terms, means long-term rates are rising more than short-term rates. This transmits to mortgages, corporate borrowing, and real estate financing, especially pressuring sectors that 'live off low rates.'

So what is truly worth watching today is the tug-of-war between two forces: on one side China is stabilizing finance and funding; on the other side global long-end rates and FX volatility continue to exert pressure. The former is more like a floor, the latter more like a ceiling. The market may not move in one direction in the short term, but the causal chains are clear.

Below are several related ETFs.

First, look at FXI. It is directly related to today’s China thread. FXI's actual intraday moves over the past 5 trading days, i.e., last week, are not listed separately this time, so only qualitative observation is possible here. Looking forward, the ETF Radar model is biased positive for FXI over the next 1 to 3 months, with fairly consistent signals. The support mainly comes from today’s policy chain itself: the central bank emphasizing resolving local financing platform risks and the FX authority emphasizing expanding institutional opening — both ease the credit and funding concerns that Chinese assets worry about most. This Q segment did not provide separate quantitative figures for FXI, so to be honest, there is no independent quantitative corroboration this time; the support is more directional from policy.

Second, look at IEF, the intermediate-duration US Treasury ETF. It has real transmission with today’s 'yen stabilizing, US long-end rising' theme. IEF's actual move over the past 5 trading days, i.e., last week, was down 0.09%. The ETF Radar model is biased negative for IEF over the next 1 to 3 months, with fairly consistent signals. Duration here, in plain terms, is how sensitive a bond is to interest rate changes — the longer the duration, the more the price falls when rates rise.

There are three quantitative reads. First, CFTC 10-year futures net shorts are -2,155,739 contracts. Net short, in plain terms, means large players' bearish positions exceed bullish ones by a significant amount. Second, the US 10-year yield is at 4.68%, with a term premium of about 0.8376%. Term premium, in plain terms, is the extra return investors demand for lending money for a long time. Third, ECB wage-tracking data show a smoothed value of 2.3% for 2026, rising to 2.7% in Q1 2027. Wage stickiness, in plain terms, means once wages rise they do not fall quickly, making inflation harder to bring down rapidly. The transmission is: if inflation and wages are not soft, the Fed and ECB are reluctant to ease quickly, long-term yields stay elevated, and IEF comes under pressure.

Third, look at TLT, the longer-duration US Treasury ETF. TLT's actual move over the past 5 trading days, i.e., last week, was down 1.20%. The ETF Radar model is biased negative for TLT over the next 1 to 3 months, with fairly consistent signals. It is more vulnerable to rate increases than IEF because it has longer duration; in plain terms, it's more sensitive to small changes.

Quantitatively there are three points. First, CFTC US 30-year Treasury net shorts are -391,386 contracts, indicating large players are overall positioned for long bonds to weaken. Second, TLT option put IV is 13.33%, higher than call IV at 11.82%, with IV at the 90th historical percentile. Implied volatility, in plain terms, is how much the market is willing to pay for 'insurance'; puts being more expensive than calls indicates greater demand to hedge against downside. Third, TLT has had net redemptions of -$320M since July 23, approximately -0.77% AUM. AUM is the fund's total assets under management; net outflows mean money is pulling out. To be candid, TLT's decline has already partially played out — it has fallen 3.81% over the past month — so the model sees continued pressure over the next 1 to 3 months, not that it will necessarily fall every single day in the short term.

Fourth, look at VDE. It is not directly related to today's China financial-regulatory thread; this is a separate system-wide medium-term stance. VDE's actual move over the past 5 trading days, i.e., last week, was down 0.15%. The ETF Radar model is biased positive for VDE over the next 1 to 3 months, with multiple pieces of evidence aligned. Its main logic still comes from geopolitical tensions affecting energy supply and shipping risk.

Quantitative reads: first, CFTC speculative net longs are about 63,979 contracts. Net long, in plain terms, means bullish positions exceed bearish ones. Second, the oil futures curve shows near-month 84.67 versus 12-month 70.27, slope_pct 20.492%, which is clear backwardation. Backwardation, in plain terms, means spot and near-month are tighter, so near-month prices are higher than further-out months. Third, VDE has outperformed SPY by 8.89% in this thematic window. Excess return, in plain terms, is the part of the gain above the broader market. Note that VDE did not gain much in the last 5 trading days, but the model is still positive — this is a short-term versus medium-term divergence: last week's price took a breather, which does not mean the 1 to 3 month thesis is over.

If there is one contrarian note, it is SOXX. It fell 4.20% last week and 10.85% over the past month, and the system now shows neutral divergence on SOXX. Divergence, in plain terms, means the bullish and bearish evidence are not strong enough to decisively outweigh each other. So even though the broader market was not bad last Friday, technology and semiconductors did not fully keep up, reminding us that the market's internal moves are not in lockstep.

Finally, a quick wrap. The clues today are clear: on this first trading day of the week, weekend-accumulated news shows one side where China is shoring up finance and funding, and the other where the yen and long-term yields continue to roil global pricing — floor and pressure exist simultaneously. Reminder again: the above are directional forecasts from a systematic quantitative model for general market conditions and do not constitute personal investment advice; consult a licensed investment advisor before investing.