Admittedly, ISM Non-Manufacturing and Factory Orders are not the most critical market-moving economic reports. Case in point, see the 58k 10yr contracts traded in the 10 minutes following these two, versus the 268k contracts in the 10 minutes following NFP earlier this morning.

That said, they're enough to give already teetering bond markets a slight nudge, resulting in MBS revisiting their lows of the day at 103-18+ and 10yr yields pushing higher past support. The breakout in 10yr yields is only slight at this point, but if it goes any further, MBS could soon be looking at their own break of support.

The NMI registered 56.8 percent in January, 3.8 percentage points higher than the seasonally adjusted 53 percent registered in December, and indicating continued growth at a faster rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index registered 59.5 percent, which is 3.6 percentage points higher than the seasonally adjusted 55.9 percent reported in December, reflecting growth for the 30th consecutive month.

The New Orders Index increased by 4.8 percentage points to 59.4 percent, and the Employment Index increased by 7.6 percentage points to 57.4 percent, indicating substantial growth in employment after one month of contraction. The Prices Index increased 1.5 percentage points to 63.5 percent, indicating prices increased at a slightly faster rate in January when compared to December. According to the NMI, 12 non-manufacturing industries reported growth in January. Respondents' comments are mostly positive about business conditions. There is concern about cost pressures and the sustainability of the recent spike in activity.

RTRS - ISM NON-MANUFACTURING PMI INDEX AND BUSINESS ACTICITY INDEX AT HIGHEST SINCE FEBRUARY 2011

RTRS- ISM NON-MANUFACTURING EMPLOYMENT INDEX AT HIGHEST SINCE FEB 2006

RTRS - ISM NON-MANUFACTURING NEW ORDERS INDEX AT HIGHEST SINCE MARCH 2011

New orders for manufactured goods in December, up two consecutive months, increased $5.3 billion or 1.1 percent to $466.2 billion, the U.S. Census Bureau reported today. This followed a 2.2 percent November increase. Excluding transportation, new orders increased 0.6 percent.

Shipments, up seven consecutive months, increased $3.4 billion or 0.7 percent to $459.4 billion. This followed a 0.2 percent November increase.

Unfilled orders, up twenty of the last twenty one months, increased $12.7 billion or 1.4 percent to $911.5 billion. This followed a 1.3 percent November increase. The unfilled orders-to-shipments ratio was 6.00, down from 6.13 in November.

Inventories, up twenty six of the last twenty seven months, increased $0.4 billion or 0.1 percent to $610.1 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 0.4 percent November increase. The inventories-to- shipments ratio was 1.33, down from 1.34 in November.

RTRS- U.S. DEC FACTORY ORDERS +1.1 PCT (CONSENSUS +1.5) VS NOV +2.2 PCT (PREV +1.8 PCT)

RTRS - "Orders for non-defense capital goods excluding aircraft - a closely watched category because it is taken as a sign of businesses' future spending plans - climbed a solid 3.1 percent in December. That followed declines of 1.5 percent in November and 0.9 percent in October. "

So far, it looks like we've witnessed a support event around 1.925 in 10yrs and 103-22 in Fannie 3.5 MBS. The latter has been ticking sideways at 103-26 for nearly 10 minutes now, and 10yrs are testing to break their lowest yields since NFP, around 1.896.

• RTRS - U.S. JAN NONFARM PAYROLLS +243,000 (CONSENSUS +150,000) VS DEC +203,000 (PREV +200,000), NOV +157,000 (PREV +100,000)
• RTRS - US JAN PRIVATE SECTOR JOBS +257,000 (CONS +170,000), DEC +220,000 (PREV +212,000)
• RTRS - U.S. JAN GOVERNMENT JOBS -14,000 VS DEC -17,000 (PREV -12,000)
• RTRS - U.S. JAN JOBLESS RATE 8.3 PCT, LOWEST SINCE FEB 2009, (CONSENSUS 8.5 PCT) VS DEC 8.5 PCT (PREV 8.5 PCT)
• RTRS - U.S. LABOR FORCE PARTICIPATION RATE 63.7 PCT IN JAN VS 64.0 PCT IN DEC
• RTRS - U.S. JAN AVERAGE HOURLY EARNINGS ALL PRIVATE WORKERS +0.2 PCT (CONS +0.2 PCT) VS DEC +0.1 PCT (PREV +0.2 PCT), TO $23.29 VS DEC $23.25; JAN YEAR-ON-YEAR EARNINGS +1.9 PCT
• RTRS - U.S. JAN AVERAGE WORKWK ALL PRIVATE WORKERS 34.5 HRS (CONS 34.4 PCT) VS DEC 34.5 HRS (PREV 34.4), FACTORY 40.9 VS 40.6, OVERTIME 3.4 VS 3.3
• RTRS - U.S. JAN FACTORY JOBS +50,000, BIGGEST INCREASE IN ONE YEAR, (CONS. +15,000) VS DEC +32,000 (PREV +23,000)
• RTRS - ANNUAL REVISION ADDS 162,000 JOBS FROM MARCH 2011 NON-SEASONALLY ADJUSTED LEVEL VS. EARLY OCT ESTIMATE OF +192,000
• RTRS - ANNUAL REVISION ADDS 165,000 JOBS FROM MARCH 2011 LEVEL ON A SEASONALLY ADJUSTED BASIS
• RTRS - U.S. JAN GOODS-PRODUCING JOBS +81,000, CONSTRUCTION +21,000, PRIVATE SERVICE-PROVIDING JOBS +176,000, RETAIL +10,500
• RTRS - U.S. JAN AGGREGATE WEEKLY HOURS INDEX FOR ALL PRIVATE WORKERS +0.2 PCT VS DEC +0.5 PCT
• RTRS - U.S. JAN NONFARM PAYROLLS INCREASE LARGEST SINCE APRIL 2011, GOODS-PRODUCING JOBS INCREASE LARGEST SINCE JAN 2006

more to follow. pretty ugly so far. 10's up almost 10bps, MBS down 24 ticks to 103-10. Could be that we're seeing the ugliest part of the whipsaw reaction, but we'll update you either way.

On Monday, 10yr yields began the week at just over 1.84, and they've traded about a 6bp range ever since. From lunch-time on Wednesday through right now, there are no hour-over-hour moves greater than 2bps. This is a very calm market that has arguably been waiting for SOMETHING, perhaps resolution to Greek bond-swap/PIL, perhaps NFP, or perhaps a combination of the two.

Overnight trading seems to give the nod to NFP as Reuters reported EU governments might have to give Greece another 145 bln Euros in a 2nd assistance package. If we stretch our imaginations, we can maybe see some volume come in around that news, bringing yields down slightly, but a) it wasn't much and b) we're smack dab in the middle of the week's range.

MBS opened 1 tick up and Treasuries just under 1bp lower than yesterday. The whole of the overnight session took place in a 2 bp range in 10yrs and in moderately light volume. Stock futures are dead even with yesterday's 4pm levels. So we'll say that which the market seems to have already said: bring on NFP!