Why this number is a big deal Thursday

ADP payroll data could have a little more clout Thursday after it foreshadowed last month's disappointing employment report.

In addition to ADP, traders are also watching OPEC's meeting in Vienna, which could have impact on oil for months to come, as well as comments from European Central Bank President Mario Draghi after the ECB meeting early Thursday.

The private sector ADP payroll report is not widely seen as a reliable indicator for the government's jobs report, expected Friday, but last month it reported just 156,000 jobs. Two days later, April nonfarm payrolls came in at just 160,000, 40,000 shy of expectations. According to Thomson Reuters, 175,000 jobs are expected for May from ADP, while 162,000 nonfarm payrolls are expected in the government report Friday.

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A job seeker, right, shakes the hand of a recruiter during the Quad Cities Career Fair in Moline, Illinois.
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"If I were not a cynic, I'd say we'll see a positive surprise," said Don Townswick, head of equities at global investment management firm Conning.

Markets are on economic data watch, as traders tally the hits and misses that could influence the Fed's rate hiking decision at its June 14 and 15 meeting. There is also weekly jobless claims at 8:30 a.m. EDT.

"If [ADP] misses it by a mile, people will say, 'I told you so, ADP never hits it.' Then the next month it's important again. We're dealing with extreme uncertainty so everything helps," said Chris Rupkey, chief financial economist at MUFG Union Bank. "The debate seems to be what is the true run rate for jobs. As we reach full employment, it should no longer be 200,000 a month. It should be somewhat less: 160,000, 170,000."

Stocks closed with slight gains Tuesday, boosted by a turnaround in oil prices and a surprise increase in ISM manufacturing data. The S&P 500 was up two at 2,099, just below the key 2,100 level.

Oil will also be a key for markets. OPEC is expected to make a statement in the morning. There is also U.S. oil inventory data at 11 a.m. EDT, and natural gas data at 10:30 a.m. West Texas Intermediate oil futures were at $49.25 per barrel in late afternoon trading Tuesday after sliding below $48 earlier in the day. OPEC, which meets in Vienna Thursday, was reported to be discussing an output limit, and those reports boosted crude futures closer to $50.

"I think $50 is a very important psychological level," said Townswick. According to the latest CNBC oil survey, it is a level where drilling would begin to come back in the U.S., though $60 is a level that would drive much more production. OPEC disappointed markets last time it met, failing to reach an accord on a much-discussed production freeze. That led to a steep decline in oil prices, with oil bottoming at about $26 per barrel in February.

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"I think one of the things that's helping the market [Wednesday] is there does seem some to be some underlying strength in the economy. People are looking beyond pure GDP numbers for reasons to bid stocks up," said Townswick. He said he expects one rate hike this year, sometime after the summer. As a result of the combination of stock levels and interest rates, "every little drop of good news might actually turn into something."

Townswick said there's a historically low level of equity investment and a lot of cash that could be put to work.

"I think that continued monetary stimulus is not helpful. ... I think it's pushing on a string and what it's really affecting is confidence," he said. "If it's going to worship the Fed as it does, the market needs the Fed to say things are so good we're going to raise interest rates because we're afraid of inflation.

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"I've never lived through so many years where nobody has said anything about the economy that was positive."

A strong series of data could cause volatility in markets that are not now poised for a rate hike just several weeks from now.

"The markets are not prepared for a June rate hike. Brexit throws a monkey wrench into it," said Rupkey. The U.K. referendum June 23 to leave the European Union is termed Brexit, and the latest polling shows voters favor a split, seen as a negative that could upset the markets.

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"If jobs were to surprise, and it's 250,000 plus, June could come back on the table in a hurry. It could be an interesting few days, including Monday," said Rupkey. On Monday, Fed Chair Janet Yellen is expected to make a major speech, and traders expect major clues from the Fed chair on policy.

Besides the data, traders will be watching Fed Gov. Jerome Powell who speaks on regulation at 8:35 a.m. EDT, and Dallas Fed President Rob Kaplan who speaks at 1 p.m. EDT at a conference at Boston College.

The ECB is not expected to take action at its meeting, but it could elaborate on asset purchases.