chore: Update Changelog with 0.42.7 section (#9679)

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## Description


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### Author Checklist

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I have...

- [ ] included the correct [type prefix](https://github.com/commitizen/conventional-commit-types/blob/v3.0.0/index.json) in the PR title
- [ ] added `!` to the type prefix if API or client breaking change
- [ ] targeted the correct branch (see [PR Targeting](https://github.com/cosmos/cosmos-sdk/blob/master/CONTRIBUTING.md#pr-targeting))
- [ ] provided a link to the relevant issue or specification
- [ ] followed the guidelines for [building modules](https://github.com/cosmos/cosmos-sdk/blob/master/docs/building-modules)
- [ ] included the necessary unit and integration [tests](https://github.com/cosmos/cosmos-sdk/blob/master/CONTRIBUTING.md#testing)
- [ ] added a changelog entry to `CHANGELOG.md`
- [ ] included comments for [documenting Go code](https://blog.golang.org/godoc)
- [ ] updated the relevant documentation or specification
- [ ] reviewed "Files changed" and left comments if necessary
- [ ] confirmed all CI checks have passed

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I have...

- [ ] confirmed the correct [type prefix](https://github.com/commitizen/conventional-commit-types/blob/v3.0.0/index.json) in the PR title
- [ ] confirmed `!` in the type prefix if API or client breaking change
- [ ] confirmed all author checklist items have been addressed 
- [ ] reviewed state machine logic
- [ ] reviewed API design and naming
- [ ] reviewed documentation is accurate
- [ ] reviewed tests and test coverage
- [ ] manually tested (if applicable)

CHANGELOG.md

@@ -208,7 +208,6 @@ Ref: https://keepachangelog.com/en/1.0.0/
 * (x/params) [\#9481](https://github.com/cosmos/cosmos-sdk/issues/9481) Speedup simulator for parameter change proposals.
 * (x/staking) [\#9423](https://github.com/cosmos/cosmos-sdk/pull/9423) Staking delegations now returns empty list instead of rpc error when no records found.
 * (x/auth) [\#9553](https://github.com/cosmos/cosmos-sdk/pull/9553) The `--multisig` flag now accepts both a name and address.
-* (baseapp) [\#9578](https://github.com/cosmos/cosmos-sdk/pull/9578) Return `Baseapp`'s `trace` value for logging error stack traces.
 * [\#8549](https://github.com/cosmos/cosmos-sdk/pull/8549) Make gRPC requests go through tendermint Query
 * [\#8093](https://github.com/cosmos/cosmos-sdk/pull/8093) Limit usage of context.background.
 * [\#8460](https://github.com/cosmos/cosmos-sdk/pull/8460) Ensure b.ReportAllocs() in all the benchmarks
@@ -229,7 +228,6 @@ Ref: https://keepachangelog.com/en/1.0.0/
 * [\#9480](https://github.com/cosmos/cosmos-sdk/pull/9480) Fix added keys when using `--dry-run`.
 * (types) [\#9511](https://github.com/cosmos/cosmos-sdk/pull/9511) Change `maxBitLen` of `sdk.Int` and `sdk.Dec`  to handle max ERC20 value.
 * [\#9454](https://github.com/cosmos/cosmos-sdk/pull/9454) Fix testnet command with --node-dir-prefix accepts `-` and change `node-dir-prefix token` to `testtoken`.
-* (keyring) [\#9562](https://github.com/cosmos/cosmos-sdk/pull/9563) fix keyring kwallet backend when using with empty wallet.
 * (keyring) [\#9583](https://github.com/cosmos/cosmos-sdk/pull/9583) Fix correct population of legacy `Vote.Option` field for votes with 1 VoteOption of weight 1.
 * (x/distinction) [\#8918](https://github.com/cosmos/cosmos-sdk/pull/8918) Fix module's parameters validation.
 * (x/gov/types) [\#8586](https://github.com/cosmos/cosmos-sdk/pull/8586) Fix bug caused by NewProposal that unnecessarily creates a Proposal object that’s discarded on any error.
@@ -245,6 +243,20 @@ Ref: https://keepachangelog.com/en/1.0.0/
 * (grpc) [\#8926](https://github.com/cosmos/cosmos-sdk/pull/8926) The `tx` field in `SimulateRequest` has been deprecated, prefer to pass `tx_bytes` instead.
 * (sdk types) [\#9498](https://github.com/cosmos/cosmos-sdk/pull/9498) `clientContext.JSONCodec` will be removed in the next version. use `clientContext.Codec` instead.
 
+## [v0.42.7](https://github.com/cosmos/cosmos-sdk/releases/tag/v0.42.7) - 2021-07-09
+
+### Improvements
+
+* (baseapp) [\#9578](https://github.com/cosmos/cosmos-sdk/pull/9578) Return `Baseapp`'s `trace` value for logging error stack traces.
+
+### Bug Fixes
+
+* (x/ibc) [\#9640](https://github.com/cosmos/cosmos-sdk/pull/9640) Fix IBC Transfer Ack Success event as it was initially emitting opposite value.
+* [\#9645](https://github.com/cosmos/cosmos-sdk/pull/9645) Use correct Prometheus format for metric labels.
+* [\#9299](https://github.com/cosmos/cosmos-sdk/pull/9299) Fix `[appd] keys parse cosmos1...` freezing.
+* (keyring) [\#9563](https://github.com/cosmos/cosmos-sdk/pull/9563) fix keyring kwallet backend when using with empty wallet.
+* (x/capability) [\#9392](https://github.com/cosmos/cosmos-sdk/pull/9392) initialization fix, which fixes the consensus error when using statesync.
+
 ## [v0.42.6](https://github.com/cosmos/cosmos-sdk/releases/tag/v0.42.6) - 2021-06-18
 
 ### Improvements