(Updates at 1035 GMT)

By Harry Robertson

LONDON, June 27 (Reuters) - Euro zone government bond

yields rose to their highest levels in two weeks on Thursday as

investors looked ahead to inflation data due from the United

States and Europe.

The risk premium investors demand to hold French debt

widened to within striking distance of a seven-year high hit

almost two weeks ago, as markets looked towards the first round

of parliamentary elections at the weekend.

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

the euro zone, rose to 2.471% in early trading, the highest

since June 14. It last stood 1 basis point (bp) higher at

2.463%. Yields move inversely to prices.

Stronger-than-expected inflation prints from Australia and

Canada this week have reminded markets that the battle against

price rises is ongoing.

U.S. personal consumption expenditure (PCE) inflation data

for May is due on Friday, and is likely to guide Federal Reserve

policy and have knock-on effects for other central banks.

Piet Haines Christiansen, chief strategist for fixed income

research at Danske Bank, said bond markets were giving back some

of their gains clocked after French President Emmanuel Macron

called snap elections on June 9, which caused investors to flock

to the safety of bonds, German debt in particular.

"Now we're seeing that basically, no news leads to higher

rates," he said. "While we're waiting for something, we need to

reprice somewhat back to where we were pre 9 June."

France's 10-year bond yield rose to 3.264% in

early trading, the highest since June 11, and was last up 3 bps.

Italy's 10-year yield climbed to 4.041%, the highest

since June 12.

The risk premium investors demand to hold French debt crept

higher, with the so-called spread between French and German

10-year yields rising to 79 bps, near the more

than 80 bp level hit on June 14.

Italian bonds' spread over their German peers

also rose, up to 157 bps. The spread hit its widest since

mid-February on June 14 at 159 bps as investors bought German

bonds.

Haines Christiansen said investors were also looking towards

next week, when euro zone inflation figures for May will be

released and the European Central Bank's annual Forum on Central

Banking will take place in Portugal.

France and Spain are among the countries to release

inflation data tomorrow, ahead of the euro zone-wide number.