A half-dozen Fed speakers and some fresh jobs data could create some waves for markets when bond traders return to their desks Thursday.
One of the first up will be Fed Chair Janet Yellen, who makes welcoming remarks at a Fed conference on post-crisis monetary policy in Washington at 9:30 a.m. ET. But the official who might make more news is New York Fed President William Dudley who speaks on the economic outlook at the New York Economics Club at midday and will be taking questions from the group.
Fed officials have talked up their intention to raise interest rates in December if economic data are strong enough, and last week's monthly employment report gave them another shot of confidence.
"I think they're likely to reinforce the idea they have this as a tool and they're going to use this if possible. The most recent information and icing on the cake that gives them the opportunity to raise rates was the 2.5 percent year-over-year wage inflation" in the October employment report, said Zane Brown, fixed income strategist at Lord Abbett.
The bond market was closed for Veterans Day on Wednesday, but stocks traded. The Dow fell 55 to 17,702, and the S&P 500 dropped 6 to 2,075. In the currency market, the dollar gave back some recent gains and the euro was trading at $1.07.
The oil market was busy, with West Texas Intermediate crude futures slumping 2.9 percent on reports of rising U.S. stockpiles. Government oil inventory will be released Thursday morning, delayed by Wednesday's holiday.
There is some economic data Thursday, after a quiet Wednesday. Weekly unemployment claims are reported at 8:30 a.m., and JOLTs, job opening and turnover data, is released at 10 a.m. JOLTs is a number watched by the Fed. "I think of those numbers, the JOLTs is going to be the most important. The ratio we want to look at is applications, relative to jobs. They also look at the quits ratio," said Brown.
Traders were also watching European Central Bank President Mario Draghi who spoke Thursday to the European Parliament and reinforced the ECB's commitment to expand its easing programs.
Those comments helped add pressure to the euro, which has been sagging against a stronger dollar, as the chances of a Fed rate hike have risen. Markets have been pricing in much stronger odds of a December rate hike, after U.S. central bank speakers and stronger jobs data reversed some of the uncertainty and conflicting signals from the Fed.
"I think there's probably very little more that they are likely to do. Even (Fed Gov.) Lael Brainard, in her last speech that she gave toward the end of last week, actually compromised her super-dovish stance by giving herself an out," said Brown, adding she had been one of the strongest voices opposing a rate hike. "It suggests that Janet Yellen, Fischer and Dudley probably are having their way in terms of getting and having a rate hike in by the end of the year."
Fed Vice Chair Stanley Fischer also speaks at 6 p.m. ET at the Fed conference on monetary policy. His topic is the transmission of exchange rate changes to output and inflation.
Brown said Dudley is most like to stir up markets, and he could incorporate comments on policy into his speech as well as answer questions on it.
Other Fed officials speaking Thursday, include St. Louis Fed President James Bullard, who speaks on the economy and policy at 9:05 a.m. ET at the Cato Institute's annual monetary conference, and Richmond Fed President Jeffrey Lacker, also at Cato at 9:45 a.m. Chicago Fed President Charles Evans speaks at 10:15 a.m. at a National Communities Council conference.
Equities were dragged down by energy Wednesday, and disappointing earnings from Macy's crushed the stock and weighed on sentiment. Earnings are expected Thursday from Kohl's, Cisco, Applied Materials and Nordstrom, SABMiller, Siemens, Petrobras and Viacom also report.