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Feb 13 Reuters European shares fell on Tuesday as investors turned cautious ahead of U.S. consumer price data that is crucial to determine the Federal Reserve39;s interest rate trajectory, and also assessed corporate earnings updates.

The panEuropean STOXX 600 index retreated 0.3 from a twoyear high, with ratesensitive technology shares hitting a oneweek low after a 1.9 drop.

German shares lagged regional peers and fell 0.6

All eyes will be on the U.S. consumer price index CPI for January, due at 1330 GMT. Economists polled by Reuters expect yearoveryear headline CPI to shed a welcome 50 basis points bps to 2.9, bringing it within one percentage point of the Fed39;s 2 target.

ZEW economic sentiment survey for Germany and the euro zone is due at 1000 GMT.

A lot of the volatility in the market remains in trying to price in how many rate cuts do we have by yearend. That39;s not going to change regardless of what the data says today. On rate cuts, it39;s pretty much a given now that we are going to see the start of cutting rates this year, said Daniela Hathorn, senior market analyst at Capital.com.

It39;s just the case of the magnitude, or how often are we going to see them. If we were to see a higher than expected reading, I think we could see the dollar once again pushing higher.

The odds for at least a 25 bps rate…