Market Insider

It's the central bankers vs. earnings

Traders work on the floor of the New York Stock Exchange.
Lucas Jackson | Reuters

Central bankers compete with earnings headlines Thursday, and the earnings may actually be packing more surprises.

European Central Bank President Mario Draghi holds a news briefing at 8:30 a.m. ET following the ECB's rates meeting, while Fed Chair Janet Yellen heads to Capitol Hill for a second day of testimony Thursday afternoon.

So far, just a handful of companies have reported, but Wednesday's after-the-bell reports could bring a positive tone to morning trading as both Intel and Netflix gained in after-hours trade on positive surprises.

Netflix & Intel pop after earnings

Earnings Thursday morning are expected from Goldman Sachs, Citigroup, Blackstone, Charles Schwab, First Republic Bank, KeyCorp, and M&T Bank. UnitedHealth, eBay, Sherwin-Williams, PPG and Phillip Morris also report.

Read MoreNetflix net adds, earnings top expectations

After the close, earnings are expected from Google, Schlumberger, Mattel, Advanced Micro, Celanese and Cintas.

But first, traders will focus on the ECB, which is not expected to take any action but will be closely watched as it focuses on Greece. The euro fell to $1.09 Wednesday, as markets awaited the Greek parliament vote on austerity measures.

Read MoreGreek parliament votes in favor of bailout plan

The U.S. dollar also gained against the Canadian dollar and other commodity currencies after Canada's central bank announced a rate cut.

Alan Ruskin, Deutsche Bank's head of G-10 foreign exchange strategy, said the markets look forward to a dovish Draghi.

"I think he can remain a little more optimistic on the economy. The latest lending surveys point to improvement. He can point to idea that QE seems to be working. He'll remain committed to the idea that QE will be maintained through September of next year," Ruskin said. "From a policy standpoint, he's going to sound nice and dovish."

Read MoreFed's Yellen attacked on Capitol Hill

Yellen, who spoke Wednesday morning before the House Financial Services Committee, will testify before the Senate Banking Committee at 2:30 p.m. On Wednesday, she reiterated that the Fed could raise rates this year. She did give a nod to concerns about China weakness and the Greek debt crisis, but she didn't see them as problematic enough to derail a rate hike.

Read MoreGundlach at Delivering Alpha: Fed's not hiking

The central banker reinforced that the Fed is watching the economic data, and noted that auto sales have improved, reflecting that households have the wherewithal and confidence to buy big-ticket items. But she didn't harp on the decline in June retail sales that some in the markets thought might make her sound more dovish.

"She's not using the excuses that are available to back away from a tightening. She's still suggesting there will be at least one tightening this year," Ruskin said.

Read MoreBeige Book: Economy expanding at moderate to modest pace

Yellen did stress that the rate hike trajectory will be slow, as the Fed has been telling markets. Treasury yields moved lower as the yield curve flattened, meaning yields at the low end move lower less quickly than long-end rates.

Besides central banks and earnings, there are jobless claims at 8:30 a.m.; the Philadelphia Fed survey at 10 a.m.; and the NAHB homebuilders' survey, also at 10 a.m.

Read MoreAckman at Delivering Alpha: Buy Fannie and Freddie