Barratt Developments Share News (BDEV)

* STOXX 600 slightly up

* Travel and Leisure rebound further

* Global shares near record highs

* All eyes on U.S. payrolls
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markets.research@thomsonreuters.com

THE HEDGING HEADACHE (1220 GMT)

We're entering the summer season with stock markets on
record high levels and, as many strategists believe, fully or
close to fully priced for a best case scenario.

While July so far doesn't seem that threatening, August has
a sticky bad reputation.

The month is thought to being prone to big bursts of
volatility and some investors might be tempted to protect their
portfolio in case things suddenly go south.

Geopolitical risks, inflation, downward earnings revision,
central banks unexpectedly going hanwkish, fiscal austerity
getting back into the mainstream political narrative: there's no
shortage of big volatility triggers.

Looking at the whole picture, Chris Iggo, CIO Core
Investments at AXA IM, believes there's a case for some caution,
especially for new investments.

"Option strategies in equities could work but the risk is
you pay for the insurance and it expires before the event", he
argues in his latest 'Iggo Insight' note.

Alternatively, "there is an argument for looking at
relatively cheap hedges in credit markets using credit-default
swaps which are at their lowest generic price levels for some
time", he writes.

"I am a fan of having some bond duration in portfolios just
in case risk sells off", he also says.

The idea being that "a rally in bonds in a risk-off scenario
would dampen the losses from equities to some extent" while if
stock markets remain positive and bonds sell off, the negative
return from fixed income will probably not entirely cancel off
the profits made from equities.

(Julien Ponthus)

*****

DELTA VARIANT NOT (YET?) BITING INTO THE UK RECOVERY (1153
GMT)

Things were going nicely for the UK, which had a strong
second quarter supported by one of the world's fastest
vaccination programme. Now the pandemic threatens to change the
rules of the game once again.

The economic recovery is at risk of slowing over the summer
with the spread of the highly contagious Delta variant.

High-frequency, spending data and mobility have already
pulled back a tad from recent highs.

But there are reasons for optimism. Daily confirmed cases
have been rising for weeks in Britain but the vaccination push
appears to have weakened the link between infections and deaths.

"We're watching for any signs that confidence is beginning
to dip once again if consumers become more risk-averse, though
so far we've not seen much sign of that in the surveys," ING
strategist say.

"If nothing else, rising COVID-19 cases mean higher rates of
contact tracing and self-isolation," ING says.

But this is probably not enough to worry the BoE, with
negative rates looking quite unlikely "even if we were to see
more serious economic deterioration over the summer," ING says.

(Joice Alves)

*****

ALL ROADS LEAD TO ROME (UNLESS YOU'RE AN ENGLAND FAN) (1035
GMT)

If you've missed football over the past couple of days, fret
not - the most important of all unimportant things is back
tonight when the Euro 2020 quarter finals kick off.

Plucky Switzerland takes on Spain in St Petersburg today,
the first time ever the two nations meet in this tournament.
Belgium meets Italy later tonight in Munich.

Goldman Sachs predicts that the Alpine squad will suffer a
2-1 defeat at the hands of Spain, but only after extra time.

Meanwhile the Azzurri are bound to succumb to Belgium by the
same result, the bank predicts, which would be Italy's first
ever defeat against the nation at a major tournament.

Denmark can hope that its unrivalled esprit de corps will
propel them 2-1 past the Czech Republic in Baku on Saturday,
according to the U.S. investment bank.

Meanwhile England fans, still giddy from waving Germany "Auf
Wiedersehen" in Wembley, are in for an exciting Saturday night
when the Three Lions meet Ukraine in Rome.

Goldman sees the team led by Harry Kane winning after the
two nations go to extra time or maybe even to penalties
following a 1-1 draw in normal playing time.

One big question mark is whether English fans will show up
in Rome despite a quarantine for people coming from Britain
introduced to prevent the spread of the Delta variant.

Italy has warned fans from England not to try to use
loopholes in COVID travel restrictions to sneak into the
quarter-finals even if they have a ticket.

Some Rome taxi drivers did think fans would show up from
England regardless of the defacto ban.

"I hope I get other clients and not them, not to be rascist
but for my health," said one driver called Massimo.

See: Soccer-Italy warns fans from England not to use travel
loopholes

Here's Goldman Sachs' table for the rest of the tournament:

(Karin Strohecker with Julien Ponthus)

*****

"KINDA DULL. BUT YOU DON’T SELL A DULL MARKET" (0950 GMT)

It's fair to say the past week or so hasn't been that
exciting with global equities just hovering around record highs
with investors neither wanting to double down or exit the
market.

'Buy-the-dip whenever there is one' seems to be the
consensual trade with investors torn between FOMO and the
realisation that stocks are arguably currently priced to
perfection.

One nice way to sum up the zeitgeist could be found in
today's BofA's Flow show:

Here's the MSCI's All Country World index in the past 5
sessions, now just below its all-time high hit earlier this
week:

(Julien Ponthus)

*****

EUROPE SET FOR WEEKLY GAINS AHEAD OF U.S. JOBS DATA (0745
GMT)

European shares are trading in positive territory ahead of a
closely watched monthly jobs report from the United States. It
is expected to show that job growth picked up in June.

Amid the positive mood, the pan European STOXX 600
index is gaining 0.6% and is set for the second consecutive
weekly gains. Travel, basic resources and autos are leading
sectoral gainers.

UK homebuilders are also doing well with Bellway and
Barratt gaining between 2-3%.

Things aren't looking pretty for Ambu, whose
shares are falling 11.5% after the company released a profit
warning.

Shares in Valmet are falling around 6% after the
company said it would acquire the remaining 70% stake it doesn't
own in the Finnish valves maker Neles

(Joice Alves)

*****

BRING ON THE PAYROLLS (0654 GMT)

For former Treasury secretary, Democratic stalwart and
Harvard University professor Lawrence Summers, massive U.S.
fiscal spending will set off inflationary pressures of a kind
not seen in a generation.

Forget it, say those on the other side of the inflation
debate, arguing that until wage pressures return in force, talk
about a return to inflation 1970s-style is just that.

Cue Friday's stop-everything U.S. jobs release.

Economists polled by Reuters reckon the economy created
700,000 jobs last month, up from 559,000 in May. That would be
more than the 540,000 monthly average over the past three
months. Still, employment would be about 6.9 million jobs below
its peak in February 2020.

The Fed has stressed a rise in headline inflation numbers
alone won't be enough to push it towards rate rises -- the jobs
market needs to join the inflation party too.

So non-farm payrolls -- already at the top of the economic
indicators list -- has taken on extra significance as investors
and policymakers assess whether inflation is here to stay and
what that means for the Fed outlook.

In currency markets, the view that a strong economy means
the Fed could withdraw stimulus sooner rather than later holds
sway.

The U.S. dollar is perched at a 15-month high versus the yen
and at multi-month peaks against other major currencies.

Near-term bets in favour of the dollar should be increased,
a majority of analysts in Reuters polls said.

Ahead of payrolls, global shares held near record highs.
Stock futures suggest a positive start for European markets.

Oil prices, however inched lower after OPEC+ ministers
delayed a meeting on output policy.

Elsewhere, Robinhood Markets Inc, under scrutiny after this
year's trading frenzy for so-called meme stocks such as GameStop
, on Thursday set the stage for its hotly anticipated
IPO.

Key developments that should provide more direction to markets
on Friday:

- Democratic-controlled U.S. House of Representatives
approve a $715 billion surface transportation and water
infrastructure bill.

- Euro Area May PPI.

- US data: June change in nonfarm payrolls, unemployment
rate, average hourly earnings, May trade balance, factory
orders, final May durable goods orders.

- Central Banks: ECB President Lagarde speaks.

- Fitch cuts Colombia's credit ratings to junk status.

(Dhara Ranasinghe)

*****

EUROPEAN SHARES SEEN HIGHER AHEAD OF U.S. JOBS DATA (0540
GMT)
European shares are seen opening higher ahead of U.S. jobs
data due out later today.

Monthly U.S. nonfarm payroll data is expected to show a
700,000 increase in June, and economists expect wage growth in
June of around 0.4%.

The pan European STOXX 600 index is now flirting with a
record high hit in June, as optimism over a vaccine-led economic
recovery this year saw sentiment jump to a 21-year high.

Financial spreadbetters at IG expect London's FTSE to open
21 points higher at 7,146, Frankfurt's DAX to open 32 points
higher at 15,635 and Paris' CAC to open 20 points higher at
6,574.

(Joice Alves)

*****