In Credit: Discord From Harmony

Core bond yields trended lower again last week amid worries about global growth, scant evidence of inflation and the echo of political discord in many regions. In the US, President Trump delivered his delayed State of the Union address last Tuesday.

His calls for political harmony and union were mixed with characteristic bluster. In terms of data, the January ISM nonmanufacturing measure of business confidence fell to 56.7 (from 58.0). Additionally, the November Trade Deficit fell to $49.3bn from $55.7bn. The deficit had been worsening but this data point suggests a lower drag to Q4, GDP growth. This week brings delayed retail sales data as well as inflation numbers.