Aside from the €10 billion Cyprus bailout, U.S. housing data will be another key factor for the markets this week.

Housing starts rose 0.8% in February to an annual rate of 917,000 homes, the U.S. Commerce Department reported Tuesday. That's a 27.7% increase from the year before.

On Monday, the National Association of Homebuilders said homebuilder confidence for new single-family homes fell in March for the third consecutive month. Existing home sales for February will be released Thursday.

While housing may have shown signs of improvement in recent months, perma-bear Gary Shilling, an economist and president of A. Gary Shilling & Co., a financial consultant firm, is not convinced a recovery is in the making.

"It may have bottomed, but I am not sure it has a strong recovery," he tells The Daily Ticker's Lauren Lyster in the accompanying video. "I think the risks are on the downside."