* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr (Updates prices)

AMSTERDAM/MILAN, Sept 9 (Reuters) – German government bond yields rose on Wednesday from two-week lows hit in earlier trade as global stock markets rallied, but investors are also looking towards this week’s European Central Bank policy meeting.

While no change is expected to the bank’s policy, its forecasts and messaging around its willingness to deploy bond purchases will be closely watched. The ECB’s growth and inflation projections will only show slight changes compared with June forecasts, according to a press report.

“The view was that the inflation outlook might be revised downward and that in itself would be seen as a key indicator that the door’s at least open to further stimulus. This article appears to downplay that possibility, which may also explain the heavy tone that we have seen in Bunds this afternoon,” said Rabobank head of rates strategy Richard McGuire.

The resilience of Wall Street shows that some risk-appetite is back as the Nasdaq Composite climbed more than 2% after a three-day sell-off in the tech sector, shrugging off news that AstraZeneca had paused global trials of its experimental coronavirus vaccine.

“For the time being it’s more of a risk premium rather than something that can be really priced in,” Mizuho head of multi-asset strategy Peter Chatwell said about coronavirus vaccine developments.

The yield on 10-year German bonds, viewed as a safe asset by investors, was up 3.3 basis points (bps) at -0.464%, after hitting a two-week low of -0.508% in early trade.

“In the absence of other stimuli, ten-year Bunds found a new comfort zone for their yields at -50 basis points, seeing no obvious reason why they should be less expensive than the fees for parking liquidity at the ECB”, a DZ Bank research note said.

The rate at which euro zone banks lend to each other for a three-month period fell to a record low on Wednesday, a day before the ECB meeting.

In the primary market, Germany sold 3.39 billion euros ($4 billion) in a top-up of a 10-year bond, while Portugal raised 1.21 billion euros via 10 and 25-year bonds , all via auction.

With the U.S. Treasury also due to re-open a 10-year bond, Mizuho’s Chatwell said there may be some upward pressure on high-grade yields. Bond yields tend to rise as new debt is issued, with investors making room for new supply.

Italian bond yields, expected to be a beneficiary of any additional ECB stimulus, edged down, with the 10-year 1.5 bps lower at 1.088%.

The closely watched risk premium paid by Italy over 10-year German bonds fell to 155.2 bps from Tuesday’s one-month highs .