International Airlines Share News (IAG)

* European shares edge up
* STOXX 600 hits record high
* Positive earnings offset Covid worries
* U.S. futures rise

April 15 - Welcome to the home for real-time coverage of
markets brought to you by Reuters reporters. You can share your
thoughts with us at markets.research@thomsonreuters.com

TRAVEL AND LEISURE STOCKS' RECORD HIGH TRICK (1116 GMT)
Optimism is flying high across Europe with the travel and
leisure index touching fresh record highs even if Europe
faces a third wave of Covid cases and much of the Continent is
under a lockdown.
What?
The record valuations has clearly more to do with the
leisure part of the index, rather than the travel bit.
Stay-at-home winners such as internet casino company
Evolution Gaming and British gambling group Entain
, whose shares are up a whopping 400-450% since March
2020, are leading the index' gains.
Unsurprisingly, airlines, tour operators, hotels and
restaurants stocks are lagging behind, still below pre-pandemic
levels and very far from their records.
See the chart below:
How far from Date of record
own record
Carnival -70% August 2017
Tui -65% May 2018
Accor -30% April 2015
Ryanair -20% August 2017
BA-owner IAG -55% July 2018
Lufthansa -65% January 2018
InterContinental -10% July 2019
Hotels Group
Trainline -15% February 2020
Whitbread -25% April 2015

(Joice Alves)
*****


GERMAN-ITALIAN SPREADS STAND THE PRESSURE... FOR NOW (1040
GMT)
The Italian-German bond yield spread -- a critical gauge of
the eurozone instability risk -- has been under some light
widening pressure recently on worries about Italy's domestic
debt and the EU recovery fund.
But, according to analysts, it shouldn't go far from the 100
basis points area in the short term, as long as ECB’s dovish
measures remain in place.
"We are still optimistic about Italian government bonds as
political risk has decreased significantly following Mario
Draghi's appointment as prime minister," Mauro Valle, head of
fixed income at Generali Investment, tells us.
"At the same time, the ECB support remains well oriented
towards BTPs," he adds.
Valle expects the spread to stay in a tight range of around
100 basis points and sees a further tightening to about 80 basis
points if the "eurozone economy recovers significantly and if
the market starts pricing in the positive impact of the EU
recovery fund, while the ECB support continues."
ING analysts right after the Court ruling, at the end of
March, said they saw a floor for Italian German yield spread at
90 bps as long as uncertainty lingers.
And in today's research note they said should the EU
recovery fund’s ratification process face a longer delay,
periphery spreads will be "in limbo and more vulnerable," while
German yields will be "converging to 0% later this year".
On March 26, Germany's constitutional court said the
president may not sign off on legislation ratifying the European
Union's Recovery Fund as long as it looked into an emergency
appeal against the debt-financed investment plan.
The chart below shows Germany’s 10-year Bund yield
and the German-Italian bond yield spread
.
(Stefano Rebaudo)
*****





AUTOS: THE "LOUIS VUITTON" MOMENT (0949 GMT)
Inflation is going to be hot topic this earnings season and
the auto sector seems to be fairly well positioned to weather
the temporary flame up in prices.
And for UBS analysts, auto manufacturers face what they call
a "Louis Vuitton" moment.
"In an industry notorious for lack of pricing discipline,
Q1/21 results will have a totally different playbook," they say.
"Driven by strong demand (mainly in the US and China and
globally in premium), low inventories and production bottlenecks
due to the chip shortage, OEMs will likely capitalize on their
newly gained pricing power," they add.
All in all the Swiss bank expects strong pricing will more
than offset lost volumes for most automakers with a potential
for double-digit consensus upgrades for 2021 earnings.
European autos are trading just below three year
highs and have seen 34 straight weeks of positive earnings
revisions.

(Danilo Masoni)
******


EUROPEAN STOCKS BOOSTED BY MINERS, REAL ESTATE (0738 GMT)
It's risk-on trades across the board with the Stoxx 600
index hitting a fresh record high, despite worries about an
uncertain economic rebound and U.S. stocks failing to provide
support.
A rally in commodity prices lifted miners. The travel and
leisure stock index hit a fresh record high, while real estate
shares are on the rise after the German constitutional court
ruled Berlin rent cap is invalid.
The Stoxx 600 index is up 0.3%, with real estate,
miners, and travel and leisure stock indexes up around 1%.
Shares in ABB rise 2.4% after the company posted a
Q1 beat and raised its 2021 guidance. Publicis jumps
4.5% as the company returned to organic growth for the first
time before the pandemic.
Deliveroo shares down 1.2% after its first trading update
since its IPO.
(Stefano Rebaudo)
*****



U.S. RETAIL SALES, BANK EARNINGS AND SOME ROUBLE TROUBLE
(0700 GMT)
It's down to a slew of U.S. economic data, including retail
sales, and earnings from the likes of Bank of America, Citigroup
and BlackRock to shake world stock markets out of the funk that
appears to have set in the last 24 hours.
Global stocks are in a defensive mood, edging down from
recent record highs. That follows a mixed close on Wall Street
where newly-listed Coinbase finished up 52%, down quite
a bit from its intraday highs of $429.54 on Nasdaq.
Trade in stock futures suggest a soft open in Europe, U.S.
stock futures are trading mixed.
After U.S. banks' stellar results on Wednesday -- the first
day of earnings season -- focus turns to the next batch of
earnings.
March retail sales data could also be a potential market
move, testing the recent calm in U.S. bond markets. Economists
polled by Reuters forecast a 5.9% rise, month-on-month.
Industrial production data and the Empire State
manufacturing survey are also on the calendar. So are weekly
jobless claims numbers, which have risen in recent weeks,
counter to signs of a recovery in labour markets.
And with currency investors increasingly convinced by the
Federal Reserve's argument that interest rates will stay low for
some time, any further signs of economic rebound could help
shore up the dollar.
The greenback is languishing at new four-week lows against a
basket of other major currencies.
Staying with currencies, Russia's rouble sank
more than 1% to 76.65 per dollar on reports the U.S. will
announce sanctions on Russia as soon as Thursday for alleged
election interference and malicious cyber activity.
Elsewhere, South Korea's central bank kept interest rates at
record lows of 0.5%.

Key developments that should provide more direction to
markets on Thursday:
- US corp earnings: Blackrock, Pepsi, Bancorp, Bank of
America, Delta Air, Citi, Charles Schwab, Alcoa.
- Riksbank governor Ingves speaks.
- BOJ governor Kuroda says Japan's economy picking up but
any recovery likely to be modest due to coronavirus pandemic.

- German harmonised inflation +2.0% y/y in March.
- China's Tencent plans to raise up to $4 billion
in a bond launched Thursday - sources.
- Central bank of Turkey meets.

(Dhara Ranasinghe)
*****


EUROPE SLIGHTLY IN THE RED (0528 GMT)
European stock futures are in negative territory amid weak
signals from equities outside the Continent and worries about a
slow vaccination campaign's economic impact.
Wall Street indexes closed mixed despite upbeat results from
big banks, with the tech sector the biggest underperformer after
Coinbase was sold off on its debut.
China stocks lost ground on concerns about possible further
policy tightening.
Meanwhile, today's release of U.S. weekly jobless claims and
retail sales data might put U.S. Treasury yields to the test.

(Stefano Rebaudo)
*****