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Airlines see shares finally take flight, but is it time to buy?

The aviation industry has been hit hardest by the coronavirus pandemic, with airlines grounded for months, wiping out companies profits and sending share prices tumbling. But with lockdown restrictions easing over the summer months and holidaymakers desperate to travel, airline stocks like International Consolidated Airlines Group (IAG), easyJet and Ryanair have finally seen their shares…

The aviation industry has been hit hardest by the coronavirus pandemic, with airlines grounded for months, wiping out companies profits and sending share prices tumbling.

But with lockdown restrictions easing over the summer months and holidaymakers desperate to travel, airline stocks like International Consolidated Airlines Group (IAG), easyJet and Ryanair have finally seen their shares take flight again.

But with intermittent spikes in new Covid-19 cases throughout Europe leading to travel restrictions and quarantines for passengers returning from holiday, is the recent rally by airline stocks looks like it will be short-lived?

IAG shares struggle ahead of €2.75bn rights issue

Despite IAG shares surging in the first half of August, analysts at Davy cut their rating for the stock to ‘neutral’ and issued a target price of 200p ahead of the company’s €2.75 billion rights issue.

As it stands, IAG shares are trading below that target at 192p at the time of publication, with the stock down 70% year-to-date.

In a note to clients, Davy analysts Stephen Furlong and Ross Harvey said that IAG’s upcoming rights issue, which is expected to take place in September, will likely dilute shareholders by at least 50% in exchange of the €2.75 billion the company seeks.

‘We… downgrade IAG to ‘neutral’ with its highly dilutive rights issue to come in September,’ Furlong and Harvey wrote.

‘The pertinent question for the network airlines, which transfer passengers through large hubs connecting long-haul destinations, is whether they can recover and, if so, how long will this take.’

The path ahead remains challenging for the British Airways owner, with company admitting it will take at least four years to return to pre-crisis passenger levels.

IAG is forecast to record a €2.9 billion operating loss in 2020. The airline group’s outlook in the years ahead is promising, however, with it expecting to generate €620 million profit in 2021, with that figure rising to €2 billion in 2022 and €2.7 billion in 2023.

easyJet shuts down three UK bases amid tougher travel restrictions

The budget airline said that it will close three of its bases in the UK this week after governments tightened travel restrictions in August due to spikes in new coronavirus cases.

The news is a major blow for the UK economy, with easyJet forced to close bases at London Stanstead, Southend and Newcastle airports after passenger demand has waned, with 1900 job losses expected as a result.

‘We have had to take the very difficult decision to close three UK bases as a result of the unprecedented impact of the pandemic and related travel restrictions, compounded by quarantine measures in the UK which is impacting demand for travel,’ easyJet CEO Johan Lundgren said.

Back in May, the low-cost airline said it would have to cut 4500 jobs across its European operations as a result of the Covid-19 crisis.

easyJet is trading at 558p per share at the time of publication, with the stock down 60% year-to-date.

Ryanair cancels flights after fresh quarantine restrictions

The low-cost airline told investors this week that is will reduce its flight capacity by 20% throughout September and October after passenger bookings suffered a significant hit as a result of Covid-19 related travel restrictions.

Ryanair admitted that the largest cuts to its flight schedule will be on routes to France, Spain, Sweden and Ireland.

Ryanair accused Ireland of having the most restrictive quarantine rules and urged the country to amend its ‘green list’ of safe countries. But with new coronavirus cases emerging throughout Europe things are likely to get a lot worse for Ryanair and its peers.

‘These capacity cuts and frequency reductions for the months of Sept & Oct are necessary given the recent weakness in forward bookings due to Covid restrictions in a number of EU countries,’ a spokesperson for Ryanair said.

‘Proper testing at airports, and effective tracing (as is being conducted in Germany and Italy) is the only realistic and proportionate method of supervising safe intra-EU air travel while effectively limiting the spread of the Covid-19 virus,’ the spokesperson added.

European governments travel restrictions have dried up flight demand to countries subjected to 14-day self-isolation protocols, applying intense pressure on airlines and the wider travel industry.

Unsurprisingly, the outlook for Ryanair shares remains uncertain, with a median 12-month price target of €15 and a low estimate of €11.50.

Ryanair is trading at €11.32 per share at the time of publication, with the stock down 24% year-to-date.

How to trade stocks with IG

Looking to trade IAG, easyJet, Ryanair and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs and spread bets in a few easy steps:

  1. Create an IG trading account or log in to your existing account
  2. Enter ‘International Consolidated Airlines Group’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade
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School4Trading Review – How to Spot Possible Forex Broker Fraud

School4trading Review

School4Trading Review – How to Spot Possible Forex Broker Fraud

In this School4trading Review, we will look at the features of the software, as well as the customer support. First, let us look at the interface. The design is simple and easy to navigate. It also provides a chatbot, which helps you to communicate with the broker. The customer service is warm and inviting, which is a hallmark of a good broker. In contrast, a fraudulent broker will use cold and impersonal customer support to lure people in.

Another problem with the system is that the login process is not always intuitive. You may have to retype your password several times to get in. Then, you may experience difficulties withdrawing your funds or accessing your account. In such cases, you might have to wait for days or even weeks before you can withdraw the money you’ve invested. This is not a good sign. It’s better to choose a different trading platform altogether.

If you’re having trouble logging in, you should also check the legitimacy of the broker. Whether the broker is licensed by a reliable regulatory body or closed down, you’ll want to be sure it’s legitimate. If the broker isn’t licensed by the right body, don’t trust him. You shouldn’t waste your time with an inexperienced company. This will only cause you problems in the long run.

The next factor that should be checked is the licensing. A legitimate broker will have a license from a high regulatory body. However, a broker without a license will be unreliable. Moreover, a reliable regulator will take away the license of a scam broker. As a result, a trustworthy School4Broker/Profittrade review should mention fees, account rules, and contract terms. A scam broker will be unable to operate legally.

Secondly, look for warning signs. The broker should be licensed and regulated by a reliable regulatory body. It should be regulated by a high level. If it doesn’t, it’s a scam. Lastly, it should have a website that lets you easily access your account. Moreover, you should not hesitate to check the contact information. If you find any information that seems suspicious, you should reconsider using the broker.

In summary, Forex trading isn’t easy, but it doesn’t have to be complicated. It’s not as difficult as it seems if you’ve heard about the program. You’ll learn everything about the basics and how to become a professional. But if you’re still unsure about whether this program is right for you, don’t hesitate to contact a school4trading’s website.

The most important thing to remember when it comes to Forex trading is that it’s not easy. While it’s important to have a strong background in trading, there are a number of factors that can affect your success. Having a proper plan is vital in the long run, because you will be trading with real money. And, the platform should be reliable. Otherwise, you’ll end up losing a lot of money.

As we’ve mentioned, Forex is not easy. Investing isn’t something you can do in the comfort of your own home. You need a proven system. There are no free trials, so you’ll have to find a way to do it yourself. This isn’t a scam, and it’s a great way to make money without any help. A Forex system can help you learn the intricacies of the market.

Although the process of learning Forex isn’t an easy one, it’s certainly not impossible. Fortunately, there are many people who are willing to take the time to learn how to trade. But, even the most experienced trader needs to be aware of the risks of the market. While Forex trading isn’t easy, it can be done with the right knowledge. The software’s user-friendly interface is key.

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Daily Financial News

Don’t Count On JPY Correction; Staying Long GBP/JPY

The path of the potential pace of the JPY decline may still be underestimated by markets, which continue trading the JPY long.

While the 10% USDJPY advance from September lows looks impressive from a momentum point of view, it may no thave been driven by Japan’s institutional investors reducing their hedging ratios or Japan’s household sector reestablishing carry trades.

Instead, investors seemed to have been caught on the wrong foot, concerned about a sudden decline of risk appetite or the incoming US administration being focused on trade issues and not on spending. Spending requires funding and indeed the President-elect Trump’s team appears to be focused on funding. Here are a few examples: Reducing corporate taxation may pave the way for US corporates repatriating some of their USD2.6trn accumulated foreign profits. Cutting bank regulation could increase the risk-absorbing capacity within bank balance sheets. Hence, funding conditions – including for the sovereign – might generally ease. De-regulating the oil sector would help the trade balance, slowing the anticipated increase in the US current account deficit. The US current account deficit presently runs at 2.6% of GDP, which is below worrisome levels. Should the incoming government push for early trade restrictions, reaction (including Asian sovereigns reducing their holdings) could increase US funding costs, which runs against the interest of the Trump team.

Instead of counting on risk aversion to stop the JPY depreciation, we expect nominal yield differentials and the Fed moderately hiking rates to unleash capital outflows from Japan.The yield differential argumenthas become more compelling with the BoJ turning into yield curve managers. Via this policy move, rising inflation rates push JPY real rates and yields lower, which will weaken the JPY. Exhibit 12 shows how much Japan’s labor market conditions have tightened. A minor surge in corporate profitability may now be sufficient, pushing Japan wages up and implicity real yields lower.

JPY dynamics are diametrical to last year . Last year, the JGB’s “exhausted”yield curve left the BoJ without a tool to push real yields low enough to adequately address the weakened nominal GDP outlook. JPY remained artificially high at a time when the US opted for sharply lower real yields. USDJPY had to decline, triggering JPY bullish secondround effects via JPY-based financial institutions increasing their FX hedge ratios and Japan’s retail sector cutting its carry trade exposures. Now the opposite seems to be happening. The managed JGB curve suggests rising inflation expectations are driving Japan’s real yield lower. The Fed reluctantly hiking rates may keep risk appetite supported but increase USD hedging costs.Financial institutions reducinghedge ratios and Japan’s household sector piling back into the carry trade could provide secondround JPY weakening effects

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Daily Financial News

Mexico raises interest rates, cites Trump as risk

The head of Mexico’s central bank says U.S. Republican candidate Donald Trump represents a “hurricane” sized threat to Mexico.

Banco de Mexico Gov. Agustin Carstens told the Radio Formula network Friday that a Trump presidency “would be a hurricane and a particularly intense one if he fulfills what he has been saying in his campaign.”

Trump has proposed building a wall along the border and re-negotiating the North American Free Trade Agreement.

Mexico’s central bank raised its prime lending rate by half a percent to 4.75 percent Thursday, citing “nervousness surrounding the possible consequences of the U.S. elections, whose implications for Mexico could be particularly significant.”

Mexico’s peso had lost about 6 percent in value against the dollar since mid-August. It recovered slightly after the rate hike

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