The closure of the cash bond market removes the main reference point for rates on Monday, so Treasury futures, the dollar and equities may move on thinner volumes than usual, raising the risk of exaggerated swings on any headline. With Japan and Canada also shut, Asian and North American liquidity will be lighter across FX and futures. For oil, Iran weekend risk is the key exposure: any escalation would be priced first in crude futures and on round-the-clock crypto-based oil venues, with bond markets unable to react until Tuesday. Traders may be reluctant to carry large positions into a long weekend with that risk hanging over markets.
—Sotck exchanges work on Monday while the bond market takes the day off, and with Iran headlines in play, that gap could matter more than usual.
Summary:
- NYSE and Nasdaq will trade normal hours on Monday 12 October for Columbus Day, also observed as Indigenous Peoples’ Day
- SIFMA recommends a full close of US dollar fixed income trading in the US, UK and Japan
- US banks and federal offices are closed, so no major federal economic data are due
- CME futures will trade, but bank-dependent cash settlement and collateral movements will wait until Tuesday
- Japan is closed for Health and Sports Day and Canada for Thanksgiving, thinning global liquidity
- Normal trading resumes across all US markets on Tuesday 13 October
US equity markets will open as normal on Monday 12 October for Columbus Day, also observed as Indigenous Peoples’ Day, but the US bond market will be closed, creating a split session that traders will navigate with thinner liquidity and fewer reference points than usual.
The New York Stock Exchange and Nasdaq will operate their regular hours. The Securities Industry and Financial Markets Association has confirmed its recommendation for a full close of US dollar-denominated fixed income trading, covering the cash Treasury market in the US, UK and Japan, although each firm makes its own decision on whether its desks stay open. US banks and federal government offices will be closed, so no major federal economic data are scheduled for release.
CME Group futures markets will trade, but with banking closed, cash settlement and collateral movements will not be processed until Tuesday. That means Treasury futures may trade while the underlying cash market is shut, a setup that can produce thin conditions and sharper moves on any headline.
The holiday also overlaps with closures elsewhere. Japan will be shut for its Health and Sports Day, removing Tokyo from the Asian session, and Canada’s markets will be closed for Thanksgiving. Combined, those closures leave Monday trading lighter than a typical start to the week.
The timing is significant given the backdrop. US 10-year Treasury yields hit a 24-year high this week, oil prices are being driven by headlines from the Iran war, and The New York Times reported that US military options for a short campaign against Iran are ready should President Donald Trump change course, although he has pledged not to strike before the midterm elections. Any major development over the weekend would reach markets first through currencies, futures and round-the-clock crypto venues, with the cash bond market unable to respond until Tuesday.
Normal trading resumes across all US markets on Tuesday 13 October, when bond traders will have to absorb any news from the long weekend in a single session.
This article was written by Eamonn Sheridan at investinglive.com.