Expectations for where the Federal Reserve will need to take its benchmark rate in 2023 rebounded and Treasury yields initially surged after U.S. employment and wage gains exceeded forecasts during November.

The Treasury selloff pushed two-year yields up by as much as 18 basis points (bps), to 4.41 percent, while the 10-year yield added 13 bps, to 3.63 percent. After that initial surge, the selloff found buyers later in the session, and benchmarks cut their losses by more than half, with the 30-year yield turning lower in early afternoon trading.

The steadier tone extended to market expectations for where the central bank's target will top out next year. Overnight-index swaps linked to Fed meetings showed a peak rate of 4.98 percent, before a modest pullback that left the contract still up 10 bps from where it was before the jobs data.