Risk Rally To Be Faded

Iran headlines continue, but markets are beginning to price in resolution. Equities are at all time highs, oil is down double digits on the week, and crypto ETFs just saw another billion dollars of inflows. We still view the Iran situation as a "taco trade" that ends in a deal and a risk rally, but expect that rally to fade below key Bitcoin resistance as liquidity tightens in the financial system.

Geopolitics: Same Story, Different Week

The Iran situation remains highly fluid. The US has seized or attacked an Iranian cargo vessel and renewed peace talks are due to start in Pakistan today, with JD Vance en route. Russell continues to characterise this as a taco trade: plenty of noise and brinkmanship, but ultimately a move toward ceasefire and reopening of the Strait of Hormuz. The difference this week is that markets are starting to price that outcome in, particularly in oil and equities. Russell Thompson, CIO "I am still firmly of the belief this is a taco trade. We are going to get a risk rally. We are going to get that rally from extremely high levels. We hit all time highs on equity indexes last week. This is a risk on rally that should be faded." In a recently published article on the Hilbert website, Russell sets out his broader framework for thinking about liquidity and Bitcoin, explaining why he views the current environment as one where investors should be looking to fade strength rather than chase breakouts. The piece walks through how tightening financial system liquidity can cap medium term upside for Bitcoin, even in the face of an eventual Iran resolution and renewed risk appetite, and is recommended reading for clients who want a deeper dive into the thinking behind this week’s “risk rally to be faded” stance: (

Macro Data: Cold Again In The US

US: Inflation And Growth Both Soft Indicator Actual Expected Read Existing Home Sales Miss Above actual Cold PPI (m/m) 0.5% 1.2% Cold PPI (y/y) 4.0% 4.6% Cold Industrial Production -0.5% +0.1% Cold Source: Hilbert Trader Call, 20 April 2026 The inflation and activity data from last week were uniformly soft. PPI missed both month on month and year on year, and industrial production printed negative. Russell's conclusion is unchanged: there is no justification for rate hikes in the US. Inflation as he tracks it is now just above 1 percent on a core basis, and the growth data are weakening into an oil shock. Europe And UK Region / Indicator Result Hilbert View Eurozone CPI 3.4% A little warm, but still no case for ECB hikes UK Industrial Production 0.5% vs 0.2% expected Mild growth positive; does not change no hike view Source: Hilbert Trader Call, 20 April 2026

Rates: Hike Hype Fully Unwound

Fed Funds Futures Fed fund futures have moved decisively back toward a sensible configuration after the brief period of aggressive hike pricing in early April. Meeting / Scenario Probability Comment April / Current meeting 97.9% hold 2.1% hike; Russell sees zero chance December / No change 68.0% Normalising toward base case December / Hike 1.4% Effectively dismissed December / Cut 30.0% Back to a meaningful ease probability Source: Hilbert Trader Call, 20 April 2026 US Yield Curve Instrument Level Comment 10 Year Treasury 4.25% Little change 2 Year Treasury 3.70% Little change 2s10s Spread 54bp Curve slightly steeper Source: Hilbert Trader Call, 20 April 2026 Russell reiterates his medium term view that the US yield curve will flatten into the second half of 2026 and would not be surprised to see it invert again. For now, the modest steepening reflects long end rates edging higher relative to the front end as markets price in some Iran resolution and strong equity performance.

Markets: Equities At Highs, Oil Off The Boil

Asset Level Change (w/w) Nasdaq 26,700 +2,000 (all time high) S&P 500 7,120 +500 Gold $4,830 Up on week WTI Crude ~$90 -14% on week (bounce this morning) Dutch Nat Gas Down 20% on month Down on week US Dollar Index (DXY) 98 -1% on week Source: Hilbert Trader Call, 20 April 2026 Equities have pushed to new highs in spite of the geopolitical overhang. WTI is notably lower on the week, down 14 percent, reflecting a combination of improved sentiment on Iran and demand concerns. The dollar is weaker, and European gas prices are sharply lower on the month. Russell's interpretation is that markets are increasingly pricing in an Iran resolution, even as the headlines remain noisy.

Crypto: Billion Dollar Week For ETFs

Flows And Volatility Crypto ETFs recorded about 1 billion dollars of net inflows last week. Monday saw outflows, but the next four days were strongly positive. This follows the 500 million dollars of inflows in the prior week and confirms a renewed institutional bid into the space. Level Comment Metric Realized Vol 41.5% Little changed Implied Vol (ATM) 43.5% ~2pt premium to realized 5d Put Implied Vol 58% 17·18pt premium vs calls 5d Call Implied Vol 41% Below ATM; wings discounted Source: Hilbert Trader Call, 20 April 2026 Options anomaly: Despite all time highs in equities and growing odds of peace in the Middle East, the options market still prices a 17 to 18 percentage point premium for downside protection. Call wings are trading below at the money volatility. Russell emphasises that calls are "extremely cheap" at these levels. For investors seeking exposure to an Iran resolution rally in Bitcoin, call options offer attractive asymmetry. Bitcoin Technicals And Gamma Bitcoin rallied strongly over the week. Hilbert's 7-21 indicator has turned firmly bullish. Price has broken and held the 100 day moving average at $74,300. If BTC can hold above this level for several days, Russell sees the potential for it to become a solid new base of support, particularly if Iran headlines move toward resolution. Level Price Notes 100d Moving Average $74,300 Broken and held; key short term pivot First major resistance $83,000 200d MAs clustered here Second resistance $86,500 Next upside target Gamma concentration $75,000 Significant gamma on both calls and puts Additional gamma $80k, $85k Market makers active around these strikes Expected trading band $73.5k to $76k Delta hedging likely to pin price without new news Source: Hilbert Trader Call, 20 April 2026 With substantial gamma around $75k on both the put and call side, Russell expects market makers to be actively delta hedging in a relatively tight band between roughly $73.5k and $76k. Without a new macro or geopolitical catalyst, this gamma structure is likely to keep Bitcoin pinned in that range. Positioning Open interest in Bitcoin options sits at 252,000 contracts, right in the middle of the recent range. Russell's read is that leverage in the system is not excessive. This, combined with cheap calls and expensive puts, supports the view that the market is still more worried about downside tails than positioned for an upside squeeze.

Stablecoins: USDe Update After KelpDAO Exploit

KelpDAO Exploit And DeFi Spillover KelpDAO suffered a major exploit of nearly 300 million dollars over the weekend. This had a knock-on effect across key DeFi tokens such as Aave, Uniswap, and Chainlink, all of which traded down initially before starting to recover. Aave alone saw around 9 billion dollars of deposit flight as counterparties derisked. Ethena responded by closing its cross-chain bridge temporarily as a precaution. Hilbert has reviewed the situation and does not see any imminent risk to USDe from the KelpDAO exploit, though we continue to monitor the situation closely. Stablecoin positioning at Hilbert remains unchanged. USDe Metrics Metric Level Change USDe TVL $5.7bn -~$0.1bn w/w USDe Money Market (USDtb) $938m Stable USDe Yield Up from ~3.5% 3.8% Source: Hilbert Trader Call, 20 April 2026 Hilbert stance: Despite the KelpDAO exploit and the temporary bridge closure at Ethena, Hilbert does not see a need to adjust USDe exposure at this point. The protocol level reserve changes discussed last week remain the more important driver of structural risk in USDe. The team continues to monitor both Ethena's reserve strategy and DeFi counterparty risk closely. intended for professional and institutional investors only. Hilbert Group AB is listed on Nasdaq First North Growth Market.