Good Friday superimposed non-farm payrolls data The US Treasury market may face more volatility on Friday

U.S. Treasuries rose on Thursday as traders prepare for the March non-farm payrolls report that could wade bond markets.

Employment data will be released on Friday, coinciding with the holidays that will shorten the trading time of the bond market on the same day. While the U.S. 10-year Treasury yield fell 7 basis points to 1.67 percent on Thursday, expectations of a very strong non-farm payrolls data are heating up, which could prompt the yield to move back towards a recently touched one-year high of 1.77 percent.

As has happened occasionally in the past, the first Friday of the month when the Labor Department issued its jobs report falls on Good Friday, a day when the U.S. stock market is closed, but not a federal holiday. Securities industry association Sifma has suggested that Treasury market trading continue until 12 noon New York time that day.

Meanwhile, economists estimate the median non-farm payrolls to grow by 650,000, which would be the biggest increase since October last year. Whisper's informal forecast increased from 440,000 monday morning to 800,000 today.

JPMorgan chase and company strategist Jay Barry, among others, wrote client reports that Treasury yields are quite sensitive to unexpected performance in non-farm payrolls and could be amplified when jobs data is released on trading days shortened due to holidays.

A study of JPMorgan's bond markets that has reduced trading hours during the holidays since 2007 found that U.S. 10-year Treasuries fluctuated about twice as much as they normal trading days with the release of employment data on Friday and the bond market closing early at 12 noon. On the day of the release of the non-farm payrolls data, if the market closes early at 2 p.m. (for example, before the July 4 holiday), the market will fluctuate about three times higher than the normal full-day trading day.

Treasury yields hit their lowest level since Monday on Thursday, even as the S&P 500 crossed the 4,000 mark for the first time and an index showed U.S. manufacturing recorded its fastest expansion since 1983 in March. The anomalous trend of US Treasuries may be due to the end-of-quarter effect just passed. Yesterday's 10-year yield jumped more than 3 basis points, and the US Treasury market also ended its worst quarterly performance since 1980.