Investors in Irish government bonds are showing the first signs of reacting to the looming election, according to market observers.
The gap between the cost of borrowing for Ireland and for France has widened in the past two weeks - an early indicator that the financial markets are pencilling in potential political uncertainty.
The interest rate on 10-year government bonds was 0.16% above France in recent weeks but that gap has now grown to 0.33%.
However, borrowing costs remain low for Ireland compared to the turbulence during the crisis.
Head of Fixed Income Strategy at Cantor Fitzgerald Ryan McGrath said: "The steady widening of the spread between Ireland and France is due to the election - we have now reached levels which we had not seen since early last year."
The interest rate on 10-year government bonds is 1% marginally up from 0.94% a few weeks ago.
Traders say some long-term investors have begun to trim their holdings in Irish bonds.
Spain and Portugal have also seen investors react to political uncertainty in those countries.
