LONDON, March 14 (Reuters) - Euro zone bond yields

ticked higher on Friday but remained slightly below multi-month

highs, as investors gauged the progress of a parliamentary

debate on a huge boost to German spending and the potential

impact of U.S. tariffs on Europe.

Germany's 10-year bond yield, the benchmark for

the euro zone bloc, rose 2.3 basis points (bps) to 2.88%.

The country's 10-year yield hit its highest since October

earlier this week at 2.938% as investors continued to react to

Chancellor-in-waiting Friedrich Merz's plans to spend much more

on infrastructure and overhaul German debt rules.

Italy's 10-year yield increased by 1.8 basis

points​ at 3.96%, and the gap between Italian and German bond

yields stood at 107 bps.

The spread between U.S. 10-year Treasuries and German bunds

stood at 142 bps after falling below 140 bps

earlier this week, its lowest since July 2023.

U.S. bond yields have fallen due to concerns about the

impact of President Donald Trump's tariffs on the economy.

Germany's two-year bond yield, which is more

sensitive to European Central Bank rate expectations, was up 1.7

bps at 2.2%.