International Airlines Share News (IAG)

* European stocks rise 0.1%
* Europe's travel and leisure index hits highest since 2018
* UK high street continues to suffer from a grim Christmas season

Welcome to the home for real-time coverage of European equity markets brought to you by Reuters
stocks reporters and anchored today by Julien Ponthus. Reach him on Messenger to share your
thoughts on market moves: julien.ponthus.thomsonreuters.com@reuters.net

CABLE AT $1.75? Seriously? (1211 GMT)
(Insert eye balls popping out GIF!)
Yes, you heard it right: GBP could possibly hit $1.75 versus from about $1.30 currently if
Brexit trade negotiations go extremely well, Kleinwort Hambros CIO reckons in a note looking at
"unlikely, but feasible events not priced by markets".
The wealth management arm of SocGen believes the consensus is still way below that target
because "most minds are anchored by the recent bias of the last three years, where much 'noise'
has been generated by missed deadlines and crossed red lines."
On equities, CIO Mouhammed Choukeir says the FTSE 100's negative move due to the
inverse correlation with GBP could be "blunted by a genuine, comprehensive trade deal with the
UK’s largest trading partner, helping investors look-through any short-term currency headwinds".
Kleinwort Hambros has an overweight position on UK equities.


(Thyagaraju Adinarayan)
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FASTEN YOUR SEATBELTS TO PREPARE FOR TAKEOFF (1100 GMT)
European airlines are cruising at high altitude this morning on Ryanair's upbeat
profit forecast and easing oil prices.
But the last few years haven't been easy for them, weighed down by Brexit uncertainty, 737
MAX grounding and sudden spikes in oil prices due to rising geopolitical tensions.
BofA analysts say they see further upside for EU airlines on the back of almost no
short-haul capacity growth. They have "buy" ratings on Ryanair, Wizz Air, Air France
and British Airways-owner IAG.
"With almost no capacity growth in short-haul Europe, we think demand could outstrip supply
and drive higher unit revenues. Although fuel prices have increased, high hedging levels mean
low risk to 2020 earnings."
It's going to be a good summer for European airlines as recent airline bankruptcies and
grounding of the MAX are supportive for prices, BofA says.
Here's how they fared against their global peers in the last two years:


(Thyagaraju Adinarayan)
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OPENING SNAPSHOT: ENTHUSIASM CURBED BUT RYANAIR SHINES (0855 GMT)
There was quite a lot of sarcastic comments this morning on how markets were perhaps
overlooking both geopolitical and economic risks in their triumphant march to new records.
Seems these critics made their ways to investors: the STOXX 600 is now down 0.1%
after giving up initial gains and most European bourses are trading sideways or down.
One clear winner in this session so far is Ryanair which is up 9% after raising its
guidance due to a better-than-expected performance during the holiday season.
Europe's travel and leisure index got a big boost out of it, rising over 1.5% to its highest
level since May 2018.
Another big gainer is Germany's RWE, which jumped more than 5% in early trade
after a report that the utility could receive up to 2 billion euros in compensation for a
state-ordered shutdown of lignite-powered stations.
European retail is, as expected, a big laggard (-0.4%) with big names of the UK high street
suffering from a grim Christmas season as we wrote below earlier. Superdry is down 15%, Joules
group down 26% and JD Sports 1.3%.
European banks are the biggest drag overall, down 0.7%.

(Julien Ponthus)
*****


ON THE RADAR: UK HIGH STREET XMAS LOSERS (0755 GMT)
In terms of hot segments in the European equity space, stocks from the UK street will come
under pressure again today as British fashion brand Superdry and Joules Group issued a profit
warning and B&M said sales growth slowed in the key Christmas quarter.
Pre market indications give up to two-digit falls for Superdry and Joules.
The theme of divergence between winners and losers in UK retail will continue to grow: Lidl
GB said its sales rose 11% in the four weeks to Dec. 29 as the British arm of the German
discount supermarket group outshone bigger rivals in what was otherwise a subdued Christmas
period.
Britain's biggest sportswear retailer JD Sports also said it expected annual headline pretax
profit towards the upper end of the current market view.
Among shares likely to move up, Ryanair raised its guidance for full-year profit.
RWE shares are up in pre market after a report it could get up to 2 billion in compensation
for exiting coal.
Investors will also closely watch the latest developments in the Mediaset/Vivendi saga.
Also a Reuters exclusive on Royal Dutch Shell looking to sell its oil refinery in Anacortes,
Washington.
(Julien Ponthus)
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MORNING CALL: TO INFINITY AND BEYOND (NFPS ALLOWING) (0639 GMT)
European bourses are set to follow the footsteps of global stock markets which marched on
somewhat triumphantly to new records overnight.
With the STOXX 600 expected to set a fresh record at the open, IG financial spreadbetters
see London's FTSE opening 28 points higher, Paris' CAC up 13 points and Frankfurt's DAX gaining
25 points to reach 13,521.
Note that Germany's blue chip index is getting in range of its life-high 13,596.89 points
record.
So what could possibly go wrong?
Well, apart from WWIII kicking off in the Middle East or the U.S./China unexpectedly
collapsing, not much it seems apart from this afternoon's NFPs.
"With much of Wall Street surging to fresh record highs, the biggest risk for stocks is if
we see a surprise pickup with inflation that shift the scale for the Fed’s next move to be
tightening rates", wrote Oanda analyst Edward Moya.
(Julien Ponthus)
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(Reporting by Danilo Masoni, Joice Alves, Julien Ponthus and Thyagaraju Adinarayan)