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U.S. Treasury yields were slightly lower on Thursday as investors watched for fresh weekly data on U.S. employment and ahead of a parade of Federal Reserve speakers, including Chicago Fed President Charles Evans and San Francisco Fed President Mary Daly at around 11 a.m. ET.

Fixed-income investors also await the latest policy statement from the European Central Bank at 7:45 a.m., followed by a news conference with ECB head Christine Lagarde at 8:30 a.m. An auction of 30-year bonds also is on deck at 1 p.m.

What yields are doing

What's driving the market

Treasury yields have been mostly rangebound during this holiday-abbreviated week, with the benchmark 10-year near its level from last Friday after touching a two-month high on Tuesday at around 1.37%.

New York Fed President John Williams, in a speech Wednesday hosted by St. Lawrence University, said that "assuming the economy continues to improve as I anticipate, it could be appropriate to start reducing the pace of asset purchases this year."

However, anecdotal data from the Federal Reserve's 12 business districts, the Beige Book, suggests to some economists that more improvement may be needed to meet the central bank's stated criteria of "substantial further progress" to start to reduce the Fed's asset purchases and consider normalizing monetary policy.

Williams, however, has stated that he thinks that the economy has met that standard. As New York Fed president he is a standing voter of the rate-setting Federal Open Market Committee.

Dallas Fed President Kaplan also said on Wednesday that "he'd be advocating that we should announce a plan for adjusting these purchases in the September meeting, and begin shortly thereafter, maybe in October." Kaplan isn't a voting FOMC member this year.

A host of other Fed members are slated to speak on Thursday, including Kaplan at noon, Fed Gov. Michelle Bowman at 1 p.m., and Williams at 2 p.m. Minneapolis Fed President Neel Kashkari, Boston Fed President Eric Rosengren and Kaplan participate in an event jointly at 4 p.m.

Meanwhile, investors also are looking to Europe for cues on policy, with economists now expecting a modest reduction in the rate of bond purchases made using the ECB's Pandemic Emergency Purchase Program,or PEPP.

The ECB is expected to scale back monthly PEPP purchases from EUR80 billion ($95 billion) to EUR70 billion, or possibly as low as EUR60 billion.

The larger question facing the ECB is the fate of what's called the Asset Purchase Program, which will continue even as the PEPP is due to be phased out in March 2022. Economists at ING are currently forecasting EUR314 billion of ECB bond purchases next year, against a supply increase of EUR500 billion for government, supranational and agency bonds.

Some strategists make the case that the tone of the statements by Lagarde will be more of a focus for market participants.

What analysts are saying

"The ECB will likely refrain from indicating a precise amount for PEPP purchases and, as usual, investors will look at weekly data to get indications of the size. The reduction in PEPP purchases will most likely only start in 4Q, so about one month from now," wrote analysts at UniCredit in a daily note.