US sovereign debt has 1.1% loss this year.
New York Treasuries snapped a two-day gain before a government report showed American employers added 120,000 jobs for a fourth month.
US sovereign debt has handed investors a 1.1 per cent loss this year while the nation's corporate bonds rallied 3 per cent as the economy showed signs of improvement, based on Bank of America Merrill Lynch indexes. Benchmark 10-year yields, which move inversely to the price, have climbed about half a percentage point from the record low set in September. There will be a "modest increase" in bond rates for the rest of 2012, according to Charles Schwab Corp.
"This is the first step in a gradual trend up for yields over the next couple of years," said Marc Fovinci, who helps oversee $3 billion (Dh11 billion) as head of fixed income at Ferguson Wellman Capital Management Inc. in Portland, Oregon. "The labour market has firmed up."
Ten-year notes yields were little changed at 2.19 per cent in New York, according to Bloomberg Bond Trader prices. The 2 per cent note due in February 2022 was little changed at 98 11/32. The record low yield was 1.67 per cent on September 23, versus the average of 3.86 per cent for the past decade.
Fovinci said he plans to use the money from maturing Treasuries in his portfolio to buy government debt due in less than two years, favouring short-term securities that will fall the least in price if yields rise.
The Bank of America index of US corporate debt yields 2.80 percentage points more than Treasuries.
The spread was as narrow as 2.69 percentage points on March 20, versus 3.95 percentage points six months ago.