The month of July has brought a sharp rebound in risk-parity strategies with some moderation of fears about the ECB and other central banks rushing to normalize rates, despite the Bank of Canada hiking rates and despite the data from Europe that continues to suggest tapering time is past due. Bond selling that started in earnest at the end of 2Q has stalled, while equities have rallied to new record highs. 2Q earnings are part of that story, along with a view that this is global “Goldilocks.” The FOMC is widely seen shifting to a modest balance sheet run-down in September without a rate hike, with less than a 50% chance for December linked to inflation data. The USD is sharply lower on the month – the 5th such month in a row - as the US growth has slipped in lock step with hopes for anything good out of Washington – particularly some tax reform – as healthcare reform stalls. The Trump Russian investigation has also been highlighted as a problem for the US as it tears apart the Republican consensus and blurs the focus on the Trump Agenda. Oil has consolidated with US production matching OPEC output cuts but the dramatic drop from 2Q reversed with inventories finally correcting into Summer peak demand. Geopolitical concerns are high with North Korea and US trade policy both in focus. The G20 became the G19 in July with US Paris Accord drop out being seen as isolationist. The risks in politics abated somewhat in Europe but popularity of present leaders is in doubt almost globally: inn Japan – with Abe losing the Tokyo Municipal elections and also in the UK as PM May struggles with a minority coalition into Brexit talks. The French support for Macron eased back in July with his military stand-off losing some voters and as many doubt his ability to move on Labor reforms fast enough. The favorite global leader according to a number of polls remains German Chancellor Merkel who leads with an 87% chance for re-election. The most despised leader maybe Putin but the most likely to lead to revolution is Maduro in Venezuela as protests rise after his power grab dissolves the National Assembly in favor of a Constitutional change. The fears of trouble in China have abated with its 2Q GDP, and that focus on growth throughout the world, drives the return of the risk rally, as better growth globally mixes with lower inflation to drive the stretch for yield.