Whether it's due to an organic hesitation to rally back from this morning's weaker levels or whether 10yr yields are somewhat discounting the 930am stock open, neither Treasuries or MBS have fully gotten on board with a supportive rebound following the NFP print. After getting into the 2.14's 10yr yields made it down into the 2.10's, but have bounced back to 2.124. Fannie 3.5's are grinding relentlessly into the 101-26 range, not deviating more than 1-2 ticks from there in the last hour. We'll see if the directionality of stocks changes anything shortly.

(Reuters) - Nonfarm payrolls increased 120,000 last month, the Labor Department said on Friday, in line with economists' expectations for a gain of 122,000.

The relative strength of the report was also bolstered by revisions to the employment counts for September and October to show 72,000 more jobs created than previously reported.

While part of the decline in the unemployment rate from 9.0 percent in October was due to people leaving the labor force, the household survey from which the jobless rate is derived also showed solid gains in employment.

All the increase in nonfarm payrolls in November again came from the private sector, where employment rose 140,000 after increasing 117,000 in October.

Government employment fell by 20,000. Public payrolls have dropped in 10 of the past 11 months as state and local governments have tightened their belts.

Outside of government, job gains were almost across the board, with retail surging 49,800.

Elsewhere, construction payrolls fell 12,000 after losing 15,000 jobs in October. Factory jobs edged up 2,000, with most of the gains coming from automakers.

Health care and social assistance hiring rose 18,700 after adding 30,300 job in October. Temporary hiring -- seen as a harbinger for future hiring - increased 22,300 after adding 15,800 jobs last month.

The average work week was unchanged at 34.3 hours, with hourly earnings falling two cents. (Reporting by Lucia Mutikani; Editing by Andrea Ricci)

10yr yields moved just under 2bps higher from 3pm marks in an exceedingly quiet overnight session. There's some "risk-on" pressure on Treasuries after ECB President Mario Draghi said that a "comprehensive deepening of fiscal integration" was needed and that "far reaching treaty changes should not be disregarded." The fact that Angela Merkel said that the future of the Euro is "inseparable from European unity" (as opposed to turning red and rampaging about how a fiscal union and/or Eurobonds will never happen) is apparently being perceived by some as an early indication that she's warming up to the idea.

MBS are about 4 ticks lower at 101-26, not a level that would have a desultory effect on rate sheets if it holds. But whether or not that turns out to be the case has almost everything to do with the impending Non-Farm Payrolls print at 830am. Out of 70 economists polled by Reuters, the consensus is 122k with a range of 70-160k. It feels like markets have been gearing up for something near the higher end of that range given current trading levels and the dearth of meaningful enough data to drive recent movements. As is always the case with NFP Fridays, we'll have to wait and see how things trade following the report to know for sure.