Last week saw several key economic events attempt to exert some influence on interest rate momentum without any obvious winner.  Rates ended the week somewhat higher, but most of the increase was in place at the very beginning of the week.

The theme of two-way volatility without any major changes continues as the new week gets underway.  Unlike last Friday, there were no major, scheduled events that had clear impacts on rate momentum.  Rather, the bond market took steps to prepare for the events of the next few days.

Thursday's Consumer Price Index (CPI) will be the week's most potentially consequential event.  The most widely traded inflation report, CPI has been at the scene of many of the biggest interest rate changes of the past 2 years, but notably, such reactions require a result that is far from the consensus among economic forecasters. 

In other words, CPI has the POTENTIAL to cause a big reaction, but it depends on how the report comes out.  Between now and then, the US Treasury auction cycle will serve as an opening act.  On each of the next 3 days, a large amount of Treasuries will be auctions (with results published just after 1pm ET). If demand is strong, rates could favor the lower part of their recent range ahead of CPI and vice versa.