European and Asian shares advanced on Wednesday as expectations of further monetary stimulus in China offset another mixed bag of data from some of the world's major economies.
The best growth reading out of France in two years added to signs, following better figures from Spain, that some of Europe's weaker southern economies are picking up, though the German number missed forecasts.
Much attention will focus on auctions of German and Italian government debt. A radical repricing of Bunds last month was the starting point for a rout that has spread across the world's major bond markets and raised broader financial concerns.
Bond traders and analysts say the sales on Wednesday would have to draw hefty demand to begin to stabilize the situation.
"Today is the big test for EGBs," said Peter Chatwell, a strategist at Mizuho.
Europe's main stock markets were all higher, with Paris leading with a more than 1 percent gain. Germany's DAX index gained 0.9 percent.
German 10-year bond yields, which have jumped around half a percentage point from record lows hit in mid-April, fell 2 basis points to 0.66 percent. The euro gained a third of a percent on the dollar to $1.1250.
"I think people have started to do some bottom fishing already," Tradition broker Mike Reuter said. "I think between now and Friday you'll see the (stock) market up unless there is some major piece of news."
Earlier, Asian shares advanced as investors focused on hopes of further stimulus from Beijing to prevent a sharper slowdown in the world's second-largest economy.
MSCI's broadest index of Asia-Pacific shares outside Japan was off session highs but still up 0.3 percent.
"Expect the pace of easing to be increased, or at least maintained, by the authorities through the year, in order for the GDP target of 7 percent to be attained," said Chester Liaw, economist at Forecast Pte in Singapore.
The People's Bank of China cut its benchmark one-year lending and deposit rates by 25 basis points on Sunday, the third cut in six months. Economists expect more cuts to follow.
Japan's Nikkei stock index erased early losses and ended up 0.7 percent, shrugging off a weak cue from Wall Street.
Crude oil added to its overnight gains as the weaker dollar lifted commodities denominated in the currency, and after OPEC raised slightly its forecast for world oil demand growth.
Brent was up 0.6 percent at $67.27 a barrel after rallying 3 percent on Tuesday, while U.S. crude rose another 1 percent to $61.35.
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