German debt yields added to their biggest jump in almost three years and the euro held on to its gains on Wednesday, as investors waited to hear the ECB's view of a turbulent run for markets and its hopes for a Greek aid deal.

Markets were generally calmer after Tuesday's heavy sell-off in benchmark government bonds and a mauling given to the dollar by the euro following upbeat euro zone inflation data.

European shares .FTEU3 nudged higher with Greek stocks up for a third day running and buyers moving back into southern euro zone bonds from Italy, Spain and Portugal.[GVD/EUR]

The scandal engulfing world soccer's governing body FIFA weighed on stocks in Qatar amid concerns its winning bid for the 2022 World Cup might be re-examined, but attention was primarily on Wednesday's European Central Bank meeting.

The bank will publish new forecasts that are expected to bolster signs inflation is back on the rise, while its view on Greece and the sell-off in debt markets which is neutralizing its bond-buying scheme will be of key focus.

"In our opinion, the central bank will not provide any fuel to inflame the 'tapering' discussion which has been repeatedly surfacing in recent weeks," said DZ Bank strategist Birgit Figge.

There was plenty of other news scheduled too. Poland and Brazil, eastern Europe and Latin America's biggest economies, have interest rate decisions and there will be another flurry of U.S. data ahead of Friday's non-farm payrolls. ECONG7

Ahead of the ECB meeting, the euro took a breather at $1.1135 EUR=. It had jumped 2.1 percent on Tuesday in its second biggest daily gain since Oct. 2011.

The dollar was also little changed but momentum was back with the Australian dollarAUD=D4 as it gained following strong GDP data that dealt another blow to rate cut hopes there.

BOND STRAINS

Asian share markets were generally subdued. Japan's Nikkei .N225 lost 0.3 percent and Australian shares .AXJO shed 1.1 percent on the bounce in the Aussie dollar.

"It most probably puts a floor under any further RBA easing at this stage, this is pretty much in line with their expectations," said Michael Workman, senior economist at CBA in Sydney said of the country's GDP data.

There were minor gains for Thailand and Malaysia but Shanghai's Composite Index .SSEClost 1.4 percent on a string of initial public offerings and Indonesian stocks also slipped.

With German bund yields still rising in Europe, U.S. Treasury yields also nudged 2.3 percent US10YT=RR to test their highest levels of the year as investors continue to debate whether U.S. rates will rise this year.

Lower-rated debt fared better on improved prospects of a reforms-for-cash deal for Greece, which could avert a default by the country and its potential exit from the currency union.

Greece's creditors on Tuesday drafted the broad lines of an agreement to put to the leftist government in Athens. But uncertainty remains whether Prime Minister Alexis Tsipras will accept the deal if it involves cuts in pensions and job protection, areas he has pledged to safeguard.

Greek 10-year yields GR10YT=TWEB fell 15 bps to 11.27 percent. Portuguese, Spanish and Italian equivalents were all 1 bps lower at 2.83 percent, 2.09 percent and 2.06 percent, respectively.

In commodities, oil CLc1LCOc1 lost 50 cents as traders bet that OPEC will not cut output at its latest meeting in Vienna on Friday following a recent rebound in prices. [O/R]

Gold also struggled at $1,190 an ounce and China-attuned metal copper slipped, despite data showing new business in the country's services sector rose at the fastest pace in three years.