Bond Market Holiday

Bond markets operate in a similar fashion to the stock market. It is subject to periods of closure due to annual holidays. The Bond Market Association is responsible for issuing these closures along with early closures. Just like the stock market, the bond market might close early the day before a bond market holiday and remain closed for the duration of the next day, which would be the actual day of the holiday. Every country that participates in the bond market has different holidays that they may be subject to so some markets may be closed while others are open. The Bond Market Association can only make a recommendation but they cannot enforce it. The final decision rests with each individual market firm. The recommendations of the Bond Market Association are for the bond markets in the U.S., Britain, and Japan.

The schedule of the bond market holiday affects the trading of government securities, mortgage and asset-backed securities, over the counter investments, corporate securities, municipal bonds, and money market trading that involves banks, commercial papers, and both Euro and Yankee certificates of deposits.

The traditional bond market holidays in the U.S. are as follows:

New Year's Day

Martin Luther King, Jr. Day

George Washington's Birthday

Good Friday

Memorial Day

Independence Day

Labor Day

Thanksgiving

Christmas

Depending on the current state of the market, Columbus Day might be considered as a bond market holiday.

Recently, the U.S. Treasury Department has requested fewer days of bond market holidays. They have asked bond brokers and investors to keep the bond markets open during the same time as the stock market is open. The suggestion is intended to help the Treasury department to bolster the U.S.'s lagging economy. Staying open longer will help the Treasury by giving it more time to sell large amounts of securities to pay for government stimulus plans and other financial bail-out packages.

Bond dealers and firms usually abide by the recommendations of the Bond Market Association for bond market holidays. Early closures are scheduled for 2 pm EST instead of the normal 4 pm EST. However, as the Treasury pushes more securities into the market, dealers could see more open trading days than in the past.