A look at the day ahead in European and global markets from

Ankur Banerjee

A sales miss by luxury giant LVMH due to Chinese shoppers

keeping a lid on spending and disappointing results from major

U.S. tech firms Tesla and Alphabet will likely keep investors

skittish ahead of a slew of European earnings.

A busy Wednesday sees European banks take the spotlight,

with the focus on whether gains from higher interest rates have

run out of steam and if recent political drama is weighing on

sentiment.

The euro zone's two largest lenders by market value,

Spain's Santander and France's BNP Paribas,

are due to report for the April to June period, alongside

Germany's Deutsche Bank and Italy's UniCredit

.

Luxury stocks in Europe will likely take a beating after

LVMH, owner of labels Louis Vuitton, Tiffany & Co and

Hennessy, flagged a 14% decline in sales in Asia, excluding

Japan, in the second quarter, after a 6% drop in first quarter.

A gauge of the top 10 European luxury stocks is

already down 2.6% in July, set for a fifth straight month in the

red after a profit warning from smaller label Burberry ( BBRYF )

last week.

The technology sub-index in Europe, which has been

volatile in the past few weeks due to worries of rising trade

tensions over chips, will likely be under pressure after EV

maker Tesla reported its smallest profit margin in more

than five years.

Beyond earnings, attention will also be on PMI data in

Europe that will allow investors to gauge the health of the

economy and ascertain whether the European Central Bank will cut

interest rates in September.

Currency traders are eyeing rapid gains by the yen

, which is up 3.7% against the U.S. dollar this month

and at more than six week high in the wake of suspected

intervention by Tokyo and speculators unwinding short positions

on the frail currency.

The Bank of Japan is due to meet next week as is the U.S.

Federal Reserve and while both may hold rates, a lot is at stake

if they strongly hint at diverging rate outlooks - the BOJ

hinting at hikes vs the Fed hinting at cuts.

Key developments that could influence markets on Wednesday:

Economic events: July PMI data from France, Germany, Britain

and euro zone

Earnings: Reckitt Benckiser ( RBGPF ), Santander, BNP Paribas,

Deutsche Bank and UniCredit