European equities finished the week near their lowest levels since July as rising oil prices and surging bond yields offset gains in key indexes on Friday. The Stoxx Europe 600 Index fell 0.6% for the week, though it managed a 0.6% gain on the final trading day. Germany’s DAX rose 0.5% on Friday, while the FTSE 100 and CAC 40 added 0.3% and 0.4%, respectively.
Brent crude futures climbed to a one-month high of $93.12 per barrel, capping a weekly advance of more than 5%. The surge followed U.S. President Donald Trump’s pledge to impose "economic warfare" on Iran, escalating sanctions threats and raising concerns over disruptions to oil transit through the Strait of Hormuz.
Government bond yields also climbed, with Germany’s 10-year bund yield approaching 2011 highs at 3.22% during a broader global selloff. The U.S. 30-year Treasury yield pushed past 5.33%, prompting the U.S. Treasury Department to double its long-end bond buybacks in an effort to stabilize markets. The Federal Reserve’s July meeting minutes indicated policymakers remain prepared to raise interest rates if inflation persists, while European Central Bank Chief Economist Philip Lane warned that Eurozone inflation near 3% remains unacceptable, increasing the likelihood of a September rate hike.
Corporate earnings and dealmaking added mixed signals. Swedish heating technology firm Nibe Industrier AB surged 7.4% after beating second-quarter operating profit estimates, driven by strong demand in its Climate Solutions division. In contrast, Banca Generali SpA declined 2.6% after Monte dei Paschi di Siena launched all-share takeover bids worth approximately €34 billion ($39.76 billion) for Banco BPM and the wealth manager.
UBS analysts noted that the Treasury’s intervention provides temporary relief but does not address underlying pressures. They cautioned that bond-market interventions historically offer limited long-term solutions when fiscal, inflation, or supply dynamics remain unfavorable.
