Markets have priced in sluggish U.S. growth, or even a mild recession, and strategists say it would take eye opening miss in the -75k consensus estimate to rattle the widely-held view.

"As long as the numbers are close to the consensus call you won't get a market reaction," said George Adell, fixed income strategist from Commerce Capital Markets.

Most strategists consider a figure 50k above or below the consensus to be close, while some say it would take a miss of 100k to have any lasting effect.

"I don't think there's a person in the world who thinks the economy is humming along," said Sean Murphy, a Treasury trader at RBC Capital Markets in New York. "but the violent swings have come to an end. Now you're drawing out a small area, dig into the numbers and trying to get a few basis points."

U.S. stock markets had gained in April from the first month since October and equity strategist Marc Zabicki at H&R Block expects that to continue unless payrolls are dire.

"At this point you would probably have to get a pretty bad number to rattle the market sentiment," he said. "It would take a lot to spook the market, something like -150k."

Zabicki said the knee jerk reaction of stocks might be to sell off on a number that's in line with the consensus because Wednesday's ADP employment report was unexpectedly high. Still, he said the market has grown comfortable and will continue to creep higher.

"There is some expectation of a good number built into markets and it may be a case of buying the rumour and selling the fact," Zabicki said.

RBC's Murphy said the jobs report will be a one-day event for the Treasury market. He believes the market is locked into a range.

"A lot of people are coming in to sell the highs, you might get a spike but there will be sellers of strength tomorrow. You won't get a dramatic upside," he said.

With the two-year note yielding 2.37% on Thursday, Murphy doesn't believe it will fall below the 2.00% Fed funds rate.

Murphy also said he sees little potential for the yield curve to steepen. On Thursday, the difference in yield between 10-year and 2-year maturities narrowed to the least since January 30.

He expects a strong payrolls report to attract buyers in 5-year and 10-year notes, while a weak one would only spur modest interest in the front end.

"I don't think there's a person in the world who thinks the economy is humming along," said Sean Murphy, a Treasury trader at RBC Capital Markets in New York.

We might revisit the highs on a spike up but what we saw [Thursday] was that a lot of people are coming into sell the highs. There will be sellers of strength tomorrow. You won't get a dramatic upside.

One market that could see big moves on the non-farm payrolls report is foreign exchange. Gian Espejo, senior dealer at GCI Financial Ltd, said the U.S. dollar could get a strong boost if payrolls increase. The market should be more volatile than usual because many European and Asia trading desks will be closed for holidays.

"Revisions to March's and April's tallies will be closely monitored. With liquidity significantly reduced in Asia and Europe today and tomorrow, we can see some wild swings in asset prices," he said.

Win Thin, senior currency strategist from Brown Brothers Harriman, said markets expect the Fed to hold off on cutting rates further and traders are looking for opportunities to buy the U.S. dollar.

"A small decline or even an outright rise in jobs would be very dollar-positive, reinforcing perception that Fed easing has ended," he said. "A drop in jobs between 50-100k probably wouldn't have too much effect, as market has already priced in a horrible Q2 for US economy. A job loss over 100k would probably lead to dollar selling due to perceptions that Fed may have to ease again. Still, bias is starting to shift more in favor of the dollar and away from the euro. Any euro gains are likely to be limited, in my opinion."

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