European stocks fall on delayed rate cut fears; Davos continues
Investing.com — 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 DAX index in Germany traded 0.7% lower, the CAC 40 in France traded down 0.6% and the FTSE 100 in the U.K. fell 0.4%.
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 consumer inflation 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.
Data released earlier Tuesday showed that German inflation 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. unemployment rate remained at 4.2% in November, unchanged from the previous month, while average earnings 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 German ZEW sentiment survey will highlight the European day.
The World Economic Forum continues in Davos Tuesday, with addresses due from Chinese Premier Li Qiang, European Commission
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