A worldwide sell-off in government bonds deepened on Wednesday, with the rise in long-term borrowing costs to their highest level this year spreading unease across all assets and putting stock markets under pressure too.

European equities stabilized after the previous session's heavy losses as upbeat regional economic and corporate reports helped. But bond yields continued to push higher, with investors reassessing the early year deflation scare in the light of a 50% rebound in oil prices from January's trough.

That deflation scare, itself driven by a halving of energy prices at the back end of 2014, had unleashed a wave of central bank interest rate cuts and bond buying by the European Central Bank, sank many bond yields to zero and below and lifted relatively higher yielding equities to ever higher records.

With oil now bouncing back sharply and after last week's news that Europe ending four months of consumer price deflation last month, there has been some reversal of those trades.

Oil prices jumped another 2% on Wednesday to their highest this year.

Germany's 10-year yield hit a 2015 high just under 0.6%. The yield has more than tripled in a week and risen 10-fold in just three weeks, erasing all the gains made this year.

Benchmark 10-year yields on Spanish, Italian and UK government bonds also hit year highs before retreating back below Tuesday's closing levels. The 10-year U.S. Treasury yield was within three basis points of a 2015 peak too.

"The six million dollar question is (whether) this is a new trend or a positioning washout which will run its course in the next few hours?" said Deutsche Bank economist Robert Burgess.

"When you get big crowded positioning and everything becomes consensus, it doesn't take much to trigger an unwind."