Expect rates to bounce around

Last week, after testing both highs and lows rates rallied and ended nearly where they began. Although this week doesn't have the blockbuster Jobs report due out, there are two reports scheduled for release that can cause rates to move dramatically. So what can you expect rates to do this week?

This week, most investors will be focused on Thursday's Retail Sales report and Friday's Consumer Price Index (CPI).

The Retail Sales report is a measure of the total receipts of retail stores, changes in these numbers indicates consumers spending patterns. Recently, the numbers haven't been too bad. But will oil prices finally start to affect consumers spending? A strong number here would be good for stocks but not so good for bonds as it would indicate more inflationary pressure.

The CPI will give us a read on inflation at the consumer level. Remember, increasing inflation is bad news for bonds and rates, while lower inflation numbers can often lead to lower rates.

The bottom line: Expect rates to bounce around but move somewhat sideways as the week begins. Later it the week, all bets are off as the market reacts to Retail Sales and the CPI.