Euro zone bond yields tick up ahead of historic German vote on debt brake

March 18 (Reuters) - Eurozone government bond yields edged up on Tuesday as investors awaited a German parliamentary vote that could pave the way for a massive increase in state borrowing to revive growth.

Germany's lower house of parliament is expected to vote around midday after a morning debate on the plans that could boost Europe's largest economy and stimulate growth across the region.

Germany's constitutional court on Monday threw out new challenges by opposition parties against the proposals of conservative election winner Friedrich Merz to ease constitutional debt rules - known as the debt brake - and set up a 500-billion-euro infrastructure fund.

The German 10-year bond yield DE10YT=RR rose 2.6 basis points to 2.826%. The benchmark for the euro zone rallied to its highest since October 2023 last week after a big jump in early March, when the plans were first announced.

Should the legislation pass the Bundestag lower house of parliament, it still has to go to the Bundesrat upper house, which represents the governments of the 16 states that make up Germany.

Italy's 10-year bond yield IT10YT=RR was higher by 1.8 basis points at 3.87%, and the gap between the Italian and German 10-year bond yields DE10IT10=RR was 103 bps.

Germany's two-year bond yield DE2YT=RR, which is more sensitive to European Central Bank rate expectations, was up 1.7 basis points at 2.197%.

Markets will also watch for data on Germany's investor sentiment due to be released at 1000 GMT.