18.01.201819:39:00UTC+00Benchmark U.S. Yield Closes at more than Three-year High

The yield on the 10-year Treasury note rose on Thursday, driving it back above the 2.6 percent level, a day after the Federal Reserve's Beige Book anecdotally indicated a tighter labor market was finally resulting into wage gains.

The 10-year U.S. government paper yield increased 3.1 basis points to 2.611 percent, its highest close level since September 2014, according to WSJ. The yield hit an intraday high of 2.620 percent.

Yield on the two-year note was flat at 2.043 percent, while the 30-year bond yield increased 3.8 basis points to 2.888 percent.

The movement in the bond market on Thursday was a continuation of the action in Wednesday's session after the Fed's Beige Book report. The report also noted that majority of the Fed districts are beginning to observe “ongoing labor market tightness”, a factor that could result to a rise in wages and inflation. Higher inflation could speed up the Fed's rate increases in 2018, which in theory would be supportive for U.S. yields.

Additionally, analysts said rumors that U.S. firms will repatriate earnings kept overseas was driving yields higher. That means companies would have to liquidate their by selling government paper, which in turn would drive up U.S. yields.