Germany's short-term bond yields fell deeper into negative territory Wednesday as investors continued to seek safety amid rising political risks in France that some say could challenge the future of the European single currency.

Benchmark 2-year German government bonds, known as schatz, were trading higher in terms of price Wednesday, pushing the yield to a record low -0.93% and setting the extra yield, or spread, that investors earn by owning 2-year U.S. Treasury notes to a two-decade high of 2.15%.

The moves are all the more confounding given both the current strength of the German economy -- private sector data published Tuesday showed it expanding at a six year high -- and inflation figures Wednesday confirming Eurozone consumer prices accelerated at the fastest pace since 2013.

Fixed income specialists are calling it the "redenomination trade", in reference to one of the campaign vows of far-right French Presidential candidate Marine Le Pen, who has said she want to alter the payment structures of outstanding government debt in a currency other than euros.

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Le Pen, who heads the country's Front National political party, is expected to win the first round of Presidential elections on April 23, when she faces a collection of candidates from the centre right and centre left of French politics, but is seen as unlikely to emerge victorious in the second round of voting scheduled for May 7.

However, her current popularity has investors on edge with concern that Europe's second largest economy is drifting away from the European consensus in a move that could ignite populist political movements around the region.

That theory will be put to the test next month, when the Netherlands heads to the polls to elect a new parliament on March 15 amid a surge in popularity for Geert Wilders's anti-EU Freedom Party.

Wilders, an outspoken anti-Islamist who was referred to Moroccan immigrants as "scum", has, like Le Pen, vowed to lead the country out of the EU if elected Prime Minister.

His party, however, is unlikely to form a government in the country's fragmented parliamentary system, leaving current Prime Minister -- and committed European -- Mark Rutte as the most likely winner.