* German Bund yield tests 0.50 pct again (Adds details, background comment)
* Budget concerns prompt 12 bps rise in Italy's five year yield
* Germany sells 3.1 bln euros of 2-year bonds (Adds milestones, quotes, chart)
LONDON BlackRock, the world's largest asset manager, has moved recently to a long position in Italian bonds on expectations of a market-friendly outcome to the budget discussions, the company's deputy chief investment officer for fixed income said on Tuesday.
* Graphic: Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr (Updates pricing, includes rise in U.S. Treasury yields)
* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr
* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr (Updates pricing)
* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr
* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr (Updates with market reaction to ECB, US CPI, Turkey CBRT)
* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr
Iran's elite Revolutionary Guards vowed on Sunday to exact "deadly and unforgettable" vengeance for an attack on a military parade that killed 25 people, including 12 of their comrades, and Tehran accused Gulf Arab states of backing the gunmen.