- European stock markets fell Tuesday on concerns that interest rates will remain high for longer than expected, while the annual World Economic Forum in Davos continued. 

At 03:15 ET (08:15 GMT), the in Germany traded 0.7% lower, the in France traded down 0.6% and the in the U.K. fell 0.4%.

ECB pushes back on rate cut expectations

Risk appetite is fragile in Europe, hurt by European officials pushing back against market expectations for the European Central Bank to begin lowering borrowing costs early this year.

"It's too early to talk about cuts, inflation is too high," ECB policymaker Joachim Nagel, a known hawk, said on Monday. "I want to see new data. We will wait for the next Governing Council meeting and we will see."

Eurozone rose to 2.9% in December, from 2.4% the prior month, reversing six months of consecutive falls.

Additionally, Robert Holzmann, Austria’s central bank governor, said investors should not "bank" on the ECB cutting rates at all this year in light of conflicts in the Red Sea pushing up the cost of shipping through the Suez Canal.

German inflation climbs in December

Data released earlier Tuesday showed that rose in December to 3.7%, climbing from 3.2% year-on-year in November, illustrating the difficulties the ECB officials have in deciding when to cut rates.

The U.K. remained at 4.2% in November, unchanged from the previous month, while grew by 6.6%, a fall from 7.2%, offering some help to the Bank of England’s aim at reducing inflation back to target.

Later in the session, the will highlight the European day.

Leaders gather at Davos 

The World Economic Forum continues in Davos Tuesday, with addresses due from Chinese Premier Li Qiang, European Commission President Ursula von der Leyen, U.S. National Security Advisor Jake Sullivan and Ukrainian President Volodymyr Zelenskyy.

Experian posts rise in revenue

In the corporate sector, Experian (OTC:) stock rose 2.7% after the credit data firm posted a 9% rise in third-quarter revenue, powered by strong demand for its new products.

Lindt & Spruengli (SIX:) stock rose 4.2% as the Swiss chocolate maker said its 2023 sales grew by over 10%, ahead of market expectations, boosted by higher product prices and strong sales of its pralines across markets.

Vodafone (NASDAQ:) stock rose 0.6% after the British telecommunications company agreed a 10-year partnership with Microsoft (NASDAQ:) to bring generative AI, digital, enterprise and cloud services to more than 300 million businesses and consumers across its European and African markets.

The U.S. banking sector will remain in focus this week, with Goldman Sachs (NYSE:) and (NYSE:) due to report later in the session.

Middle East supply concerns remain 

Oil prices edged lower Tuesday, but losses are limited as fears of disruptions to Middle East supplies remained a key point of support as major shipping operators steered clear of a key shipping route between Europe and Asia.

By 03:15 ET, the futures traded 0.4% lower at $72.47 a barrel, while the contract slipped 0.1% to $78.09 a barrel.

Trading volumes were limited given the U.S. market holiday on Monday, and this will mean that official from the U.S. Energy Information Administration will arrive on Thursday, delayed by one day, while industry data from the arrives on Wednesday.

Additionally, traded larg1ly flat at $2,051.80/oz, while traded 0.3% lower at 1.0914.