Investors assess the new trade agreement between the U.K. and the European Union and take in the publication of significant regional inflation data.

As investors assess the new trade agreement between the U.K. and the European Union and take in the publication of significant regional inflation data, European stock markets begin Tuesday slightly lower amid cautious trading.

In an effort to ease tensions brought on by the trade rules for the sole region of the U.K. with a land border to the EU, British Prime Minister Rishi Sunak revealed late on Monday that the U.K. and the EU had reached an agreement on post-Brexit trade arrangements for Northern Ireland.

If approved by the British parliament, the agreement would probably lead to improved ties between London and Brussels and might lessen some of the uncertainty that has damaged British assets since the country's decision to leave the EU in 2016.

Despite this, investors' pessimism is unlikely to be lifted by this news as markets grow increasingly anxious about an increase in borrowing prices while inflation remains high.

Both France and Spain have released their consumer price data for February. France’s CPI figure came in at 6.2% versus estimates of 6.1% (YoY) and Spain’s came in at 6.1% versus an estimate of 5.9%.

German import prices decreased 1.2% on a monthly basis in January, which is a positive decrease but less than the 1.5% decline anticipated.

The markets are already pricing in another 75 basis points of movements in the Eurozone by the end of the summer, in addition to the widely anticipated further 50 basis point rate rise at the ECB's forthcoming meeting in mid-March.

The German pharmaceutical and biotechnology giant Bayer will be in the limelight in the corporate world after forecasting declining operational profitability in 2023 due to rising expenses.

Moreover, companies like Ocado and Man Group are expected to report their earnings.

Tuesday saw a little increase in oil prices, but the benchmark contracts are still on track for monthly losses due to worries that demand in the world's largest economy will be negatively impacted by additional increases in U.S. interest rates.

Prior to the official data from the Energy Information Administration on Wednesday, attention will turn to the most recent U.S. oil stock data due from the American Petroleum Institute industry organisation later in the day for more hints on crude demand in the world's top energy consumer.

(Investing.com. Reuters.com)