LONDON, June 25 (Reuters) - Germany's 10-year yield

dipped on Tuesday as the euro zone benchmark bond benefited from

the nervous tone across markets, and the now closely-watched

spread between German and French bonds held steady.

The German 10-year bond yield fell 2.8 basis

points to 2.39%, in keeping with the "risk off" tone as stocks

dropped and the dollar firmed.

Italy's 10-year yield was lower by 1.5 basis

points​ at 3.91%, and the gap between Italian and German bund

yields widened 0.9 basis points to 151 bps.

France's 10 year yield was down 2.6 bps at 3.12%

and the spread between it and the German bund yield was a

fraction narrower at 70.5 basis points, having reached around 80

bps earlier in the month.

The spread is in focus ahead of France's parliamentary

elections on June 30 and July 7 in which the far-right National

Rally (RN) party looks set to win the most votes and could form

France's next government, with a left-wing coalition called New

Popular Front forecast to come in second.