Crypto News: 5 things to start your day: Europe

Good morning. Big Tech earnings fail to impress. LVMH growth slows amid China's slump. And the European Central Bank is looking at banks' bad loan provisions. Here's what people are talking about.

The "Magnificent Seven" mega-cap technology companies' earnings had a lackluster start with Tesla and Alphabet disappointing investors. Tesla fell short of Wall Street profit estimates in the second quarter, extending a rocky start to the year marked by slower sales and mass firings. Adding to the gloom, the electric-vehicle giant delayed the unveiling of its self-driving Robotaxi until October, from August. The stock fell. Alphabet shares also retreated as the company's chief signaled patience will be needed to see concrete results from artificial-intelligence investments.

Over in Europe, LVMH sales growth slowed last quarter as wealthy shoppers reined in spending on pricey Louis Vuitton handbags and Christian Dior couture. Organic revenue at the luxury group's fashion and leather goods unit — its biggest division — rose 1%, about half the gain expected by analysts. That compares with 21% growth a year earlier at the unit. LVMH Moët Hennessy Louis Vuitton SE saw sales in the region that includes China tumble 14% in the quarter. LVMH's American depositary receipts fell. The company's report follows worse-than-expected results from Swiss watchmaker Swatch and a profit warning from luxury group Burberry.

ECB officials are discussing asking banks to add about €7 billion ($7.6 billion) in provisions for leveraged loans going bad, roughly half what it had initially estimated, after its in-depth review of the business sparked a backlash among lenders. The central bank originally targeted as much as €13 billion in additional reserves but the team carrying out the work is now proposing to cut that amount, according to people familiar with the matter. Several officials had called for the figure to be reined in, the people said, asking for anonymity to discuss internal debates.

Investors will be watching a string of PMIs across Europe Wednesday, looking for the latest clues on the health of the region's economies. While in the UK, today's number may offer further insight into what Bank of England policymakers -- currently in a quiet period in advance of their Aug. 1 decision -- may do, with the prospect of an interest-rate cut looking to be on a knife-edge.

Late last summer telecoms billionaire Patrick Drahi was relying on the personal touch to soothe the frazzled nerves of his investors. As debt prices in his company Altice France came under pressure, he and his lieutenants were reassuring creditors that they'd be looked after. One prominent former owner of Altice's junk bonds, who asked to remain anonymous, says he was told Drahi would do "whatever it takes" to make good on his commitments. Today, any notion that Altice France and its creditors are in it together is history. And Drahi is one of a number of billionaires who built up an avid following of high-yield investors in the cheap-money era, and is now giving them cause for regret.

Apart from the PMIs out of the region, today's economic data calendar also includes German consumer confidence and Spanish PPI. And in the US, we expect wholesale inventories and new home sales. The ECB's Lane will be speaking.

This is what's caught our eye over the past 24 hours.

UK says banks must preserve access to cash after branch closures
EU eyes sanctions tweaks to reassure US on Russian assets plan
Blackstone bets on growth in private credit outside the US
Devaluation that threw a lifeline to Egypt is now crashing prices
Novo's obesity shot Wegovy wins UK approval as heart drug
Barclays calls on Starmer's government to lead on climate tech
Man behind Japan's $1.7 trillion rally says it's just starting

French President Emmanuel Macron is calling for a political truce during the Paris Olympics, but bond traders are more likely to see the vacuum as a time for a bearish stance and push for a wider France-Germany yield spread.

The 10-year OAT-Bunds spread blew out as soon as Macron called the snap vote in June. Although the yield gap has narrowed slightly since then, it appears to be entrenched on a path wider.

The challenges of forming a government after messy French parliamentary elections is undermining investor confidence. There's also a report that France Unbowed party announced legislative steps to try to scrap Macron's pension changes and reverse a rise in the legal retirement age to 64 from 62, which would add to French fiscal woes and give bond bears another reason to squeeze the spread wider with Germany.

French bond futures are also showing a negative outlook as falling open interest numbers suggest that traders used the bounce for the contract in the first half of July to exit long exposure. Meanwhile, lower US Treasury yields as the Federal Reserve moves toward an interest-rate cut will be of little comfort to French bonds. While that will help to give G-10 yields a general downward tilt -- with the notable exception of Japan -- for global investors it could mean increasing allocations to US bonds and away from underperforming European peers.

Mark Cranfield is a macro strategist for Bloomberg's Markets Live team, based in Singapore.