Europe close: Shares close lower as US Treasury doubles debt buyback
19th Aug 2026 15:19
(Sharecast News) - European equity markets closed lower on Wednesday as rising bond yields and oil prices remained in focus as the US Treasury said it was doubling its debt buyback to calm investors.
The benchmark Stoxx 600 index finished 0.02% lower to 651.78 with most continental exchanges lower. Germany's DAX, Italy's MIB, France's CAC 40 and Spain's IBEX were down between 0.10% and 0.73%. Britain's FTSE 100 gained by 0.10%.
US treasury yields were in focus again, with the 30‑year Treasury yield briefly hitting 5.333% overnight, a level not seen for almost two decades after touching its highest point since June 2007 on Monday. The 10-year yield hit 4.704% while the two-year yield was at 4.171% - both at multi-year highs.
On Wednesday the Treasury said it would double the size of its long-term government debt repurchases.
It said in a brief statement that it was increasing "by at least double" the size of liquidity support buyback operations for bonds maturing in the 10- to 20-year and the 20- to 30-year ranges. The current maximum size of $2bn per operation will be at least $4bn per operation.
The change will take effect from 9 September and stay in place for the remainder of this refunding quarter, to 4 November.
"Following yesterday's surge in yields the US Treasury calmed investors by announcing plans to expand purchases of long-dated debt which eased liquidity concerns and signalled officials are prepared to step in to stabilise markets when borrowing costs rise too far, too fast. On the back of this stock indices stemmed this week's falls," said IG chief technical analyst Axel Rudolph.
Oil prices rose as the US and Iran showed no real willingness to end their war. Brent crude was up 1.29% to $92.18 and West Texas Intermediate 1.65% to $86.34.
"The lack of progress between Washington and Tehran, continued disruption around the Strait of Hormuz and a series of attacks on shipping are keeping markets on edge. With US crude inventories also falling, the pressure on oil prices looks set to persist until there is clear evidence that the conflict is easing and Hormuz shipping can safely return to normal," Rudolph added.
On the economics front, inflation across the eurozone picked up as initially expected in July, according to final estimates from Eurostat released on Wednesday, with energy price growth accelerating after a brief slowdown the previous month.
The annual change in the consumer price index across the single-currency region rose to 2.9% last month, up from 2.8% in June and in line with the flash reading released three weeks ago.
Energy was 10.3% more expensive than the year before, up from an 8.5% annual increase in June, which was a marked deceleration from the 10.8% inflation rate in both April and May as fuel supply disruption in the Middle East sparked a jump in crude prices.
In equity news, shares in Geberit jumped as the Swiss plumbing materials maker reported better-than-expected second quarter results.
Straumann fell despite first-half revenues beating estimates.
Reporting by Frank Prenesti for Sharecast.com