Industrial: Middle East risks have substantially materialized. Keep an eye on US Treasuries, precious metals, and the foreign exchange market.

Industrial issued a statement that following the Venezuela incident earlier this year, the joint US-Israeli military action against Iran in the Middle East on February 28 marked the substantial landing of the second "black swan" - the Middle East risk. On February 28, during the question and answer phone conference on the US-Israeli-Iran conflict organized by Industrial, Wang Han mentioned maintaining the previous judgment of the "bull market turning bearish" and recommended focusing on US bonds, precious metals, and foreign exchange markets: when the price of gold accelerates upwards, while the US dollar and US bond prices turn from rising to falling, and when the Chinese yuan exchange rate starts to appreciate, it signifies the market's judgment that Iran can withstand the first wave of attacks by the US and Israel. The content of the phone conference is as follows: Q1: What is the nature of the US-Iran conflict this time? Why did the US choose to act at this time? A: The essence of this conflict is fundamentally a strategic adventure taken by the US to reverse its strategic predicament in the areas of the supply chain, industry, and tariffs. The US chose to act at this time mainly based on three factors: first, the active push from Israel trying to solve the Iran issue with the help of the US; second, the possibility that the US-Israel intelligence network in Iran may have been compromised following the unrest earlier this year, prompting Trump to intervene directly; third, Trump faces domestic political pressure and urgently needs a quick victory to boost his approval ratings, turn the tide of the mid-term elections. Q2: What are the strategic goals of the US, Israel, and Iran in this three-way conflict? A: Israel's core goal is to overthrow the current Iranian regime and completely eliminate the threat Iran poses to its security. Trump's goals are more complex: he not only needs to overthrow the Iranian regime but also needs a quick and successful regime change victory to stabilize domestic political support, deter strategic allies, and alleviate the decline of US global hegemony. Iran's strategic bottom line is the survival of the regime. As long as the current regime is not overthrown, if Iran can drag the US into a protracted war in the Middle East, Iran's geopolitical value will further increase, and it may receive more support from other major powers. Q3: What geopolitical chain reactions would occur if the current Iranian regime is overthrown? A: First, restructuring of the Middle East landscape, Sunni forces will be forced to compromise with Israel and the US, Turkey's diplomatic attitude may become more pro-Western; second, South Asia will be impacted, key nodes of the Belt and Road Initiative will be cut off, and Pakistan will face the dilemma of fighting on two fronts; third, changes in the great power game, Russia's southern geopolitical pressure will increase, the US will open up a pathway to enter Central Asia, and the global resource alliance architecture may gradually take shape. Q4: What regional chain reaction risks could this conflict trigger? A: Pay attention to the chain reaction risks in three directions: first, the short-term probability of escalation in the Russia-Ukraine battlefield is high, Ukraine may increase its offensive to contain Russia; second, the likelihood of India taking strategic risks in the South Asian direction has significantly increased, potentially threatening Pakistan's security; third, the risk of Japan's militarism staging a resurgence in East Asia is accelerating, and the US may further relax restrictions on Japan. Q5: What impact will this conflict have on the A-share market? A: Maintain the previous judgment of "bull market turning bearish": 1) The market will face shocks in the short term for three main reasons: first, the market's lack of understanding of Iran's importance in the Eurasian game; second, rising concerns about the US building a global resource monopoly alliance; third, expectations of rising commodity prices may affect the manufacturing sector. 2) The foundation of the bull market remains unchanged in the medium term. First, China has the world's largest industrial system, which is the most critical strategic asset; second, if Iran successfully withstands the first wave of attacks by the US and Israel, the market's judgment of major power competition will undergo a systemic reversal, and prices of US bonds, the US dollar, gold and other assets will undergo significant changes; third, the historical law of the past 300 years since the Industrial Revolution shows that the world's largest industrial power has always been the most stable presence in geopolitical competition. Q6: In addition to this, what key signals should financial markets observe? A: It is recommended to focus on US bonds, precious metals, and foreign exchange markets: when the price of gold accelerates upwards, while the prices of the US dollar and US bonds turn from rising to falling, and when the Chinese yuan exchange rate begins to appreciate, it signifies the market's judgment that Iran can withstand the first wave of attacks by the US and Israel. Q7: From a strategic perspective, what is the long-term impact of this conflict on the US? A: This is a tactical gamble by the US. If successful, the US will reap huge rewards, significantly delaying the process of its global hegemony decline; but once Iran withstands the first wave of attacks, the US may face serious consequences of "losing the ante" and could be drawn into a protracted war quagmire in the Middle East, exacerbating the strategic passive situation. However, in any case, the fact that the former global hegemon relies on such tactical gambles to solve internal and external problems indicates that the process of major changes has reached a critical point. Risk warning: Uncertainty in domestic and foreign economic policies, geopolitical risks, global economic and financial risks.