By Peter Nurse 

Investing.com – European stock markets are expected to open higher Wednesday, rebounding to a degree from the previous session’s sharp losses, but investors continue to fret about higher U.S. bond yields.

At 2:01 AM ET (0610 GMT), the contract in Germany traded 0.6% higher, in France climbed 0.6% and the contract in the U.K. rose 0.1%.

European investors closely monitor the U.S. market movements after high bond yields caused sharp losses in Europe and Wall Street. The dropped 2.8% on Tuesday, its largest selloff since March, after the benchmark climbed to a high of 1.57%. This was due to Jerome Powell, Federal Reserve Chairman, telling Senate Banking Committee that inflation may stay higher than previously thought. The selloff pushed the and the down by over 2%. 

Sentiment in Europe was helped by the fact that Wednesday’s 10-year Treasury yield fell to 1.53%.

Also helping the tone Wednesday was the news that China Evergrande Group (HK:) had agreed to sell its stake in Shengjing Bank for $1.5 billion, raising hopes the property giant will be able to make Wednesday’s $47.5 million bond interest payment deadline.

Fears of default could be widespread as the highly indebted property developer is struggling to pay its $300 billion debt. 

Back in Europe, a number of the world’s central bankers, including European Central Bank President Christine Lagarde and the Bank of England’s Governor Andrew Bailey, are all scheduled to speak at the ECB Forum on Central Banking on Wednesday.

The data slate centers around the Eurozone economic sentiment data, while corporate earnings releases will come from Next (LON:) and Travis Perkins (LON:).

Crude prices weakened Wednesday following a surprise increase in stockpiles, disrupting a rally based on signs the global market was tightening as demand rebounded from the pandemic.

According to the, U.S. crude oil inventories increased by slightly more than 4 million barrels in the last week. That would be the first increase in the country’s stocks in eight weeks if confirmed by the U.S. later on Wednesday.

By 2:10 AM ET, U.S. crude futures traded 1.8% lower at $73.93 a barrel, slipping from its highest level since July, while the contract fell 1.8% to $76.98, after previously reaching its highest since October 2018.

Additionally, rose 0.1% to $1,738.50/oz, while traded flat at 1.1681.