LONDON, March 14 (Reuters) - Europe’s benchmark German bond yield climbed to its highest level in 14 months on Tuesday, dragging up other euro zone equivalents in its wake, as nervousness around upcoming elections in the Netherlands and France appeared to recede.
A poll published on Monday showed Dutch Prime Minister Mark Rutte’s pro-business VVD party set to take 18 percent of Wednesday’s vote, ahead of the 16 percent polled for Geert Wilders’s anti-Muslim Freedom Party.
A local news report that France’s Socialist ex-Prime Minister Manuel Valls will ask voters to back centrist Emmanuel Macron was also seen denting the chances of far-right Marine Le Pen who polls show will falter in May’s presidential run-off.
Meanwhile, data confirmed that Germany’s annual inflation rate last month surpassed the European Central Bank’s price stability target of just under 2 percent for the first time since September 2012.
“We just have now revised some of the political risks, and given the overall economic environment something like 50 basis points for 10-year Bund yields looks to be something of a new normal,” DZ Bank strategist Daniel Lenz said.
German 10-year yields topped 0.50 percent for first time in 14 months, up 3 basis points on the day. Spanish 10-year yields hit their highest since November 2015 at 1.94 percent,, and Italian equivalents their highest since July 2015 at 2.41 percent. (Reporting by John Geddie, editing by Nigel Stephenson)