Equity and credit markets consolidated on recent gains last week as reporting season got underway. The start of this confession period has seen companies reporting results broadly in line with expectations (albeit headline revenue was weaker) and credit metrics remain unchanged. We expect shareholder friendly activity to continue during this period as debt is cheap (in a relative sense) and economic conditions are not overly conducive to growth. This weakness was reiterated by the Reserve Bank last week as they finally gave in to the currency market and dropped rates to 1.50%. This was expected and had little influence on interest rate (or currency) markets. In contrast US equity markets were launched to a record high on Friday supported by another solid employment report. We view the latest jobs report as one more piece in an evolving interest rate landscape. Most importantly, this data provides an important ingredient for a December or March 2017 rate increase by the Federal Reserve.   This week corporate earnings from key names including Bendigo Bank (today), Transurban (tomorrow), AGL Energy and CBA (Wednesday) and Telstra and Goodman Group (Thursday) will provide insight into what is to come. From a fundamental perspective, we expect to maintain a neutral credit view on the overall research universe but are most cautious on the property sector (with UK exposure). However, we are confident that the technical bid for credit (driven by international quantitative easing programs) will support prices in the near term.   Click below for Charts Chart 1: Bloomberg AUSBond Composite Index (Monthly) Chart 2: Bonds vs Equities 2015/2016 (Monthly) Chart 3: Term Deposit Review – July 2016