The haven appeal of U.S. assets has been burnished amid signs of strength in the world's largest economy. The New York- based Conference Board said last month that its index of consumer confidence rose in November by the most since April 2003.

"The favorite strategy will be to locate the cleanest dirty shirts -- the United States, Canada, United Kingdom and Australia at the moment," Bill Gross, who runs the world's biggest bond fund as co-chief investment officer at Pacific Investment Management Co. in Newport Beach, California, wrote in his monthly commentary this week.

Bond markets in November showed that a debt crisis that began in Europe's so-called peripheral markets of Greece and Portugal is starting to impact core economies. Germany failed to get bids for 35 percent of the 6 billion euros ($8 billion) of bonds it planned to sell on Nov. 23. Italy issued bonds this week with coupons that exceeded 7 percent, the threshold that preceded bailouts for Greece, Portugal and Ireland.

Euro-area finance ministers approved enhancements this week to their rescue fund, though they refrained from setting a target for its size.

Europe's woes helped send Bank of America's Global Broad Market Index, which consists of more than 19,000 sovereign, corporate, asset-backed and other debt securities with a value of $41.4 trillion, down for the second straight month. The losses trimmed this year's gains through Nov. 29 to 4.3 percent, after reinvested interest.

America's government bonds are up 8.8 percent in 2011, set for the best year since returning 14 percent in 2008. The debt extended gains in November even after the U.S. lost its last stable outlook from the three biggest credit-ranking companies. Fitch Ratings on Nov. 28 lowered its outlook on the U.S.'s AAA grade to "negative" following a congressional committee's failure to agree on deficit cuts.

Treasuries due in 10 years and more have returned 25 percent in 2011, the second most after Sweden among 144 bond indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies.

"Confusion in Europe will help the Treasury market," said Tsutomu Komiya, a bond investor at Daiwa Asset Management Co. in Tokyo, which oversees the equivalent of $118.7 billion and is a unit of Japan's second-biggest brokerage. Demand for safety will help keep U.S. yields low, he said.

The nation's 10-year yield will finish 2011 at 2.20 percent from 2.07 percent yesterday, according to a Bloomberg survey of banks and securities companies, with the most recent forecasts given the heaviest weightings. The record low of 1.67 percent was set on Sept. 23.

Investment-grade corporate bonds lost 1.8 percent last month, while junk-rated debt plunged 2.7 percent, based on the Bank of America indexes. High-yield, high-risk securities are rated below Baa3 by Moody's Investors Service and less than BBB- at S&P.