Much in the same vein as Greece and QE3, the Fiscal Cliff is the new mega-issue du jour for financial markets.  That this was likely to become an issue is nothing new, and we weren't alone in citing the CRFB piece back in July.  But now that Greece is continuing to gain acceptance as a longer term (bur firmly lodged) thorn in the EU's side, and now that the question of whether or not the Fed will announce a QE3 has been answered, where can markets turn for their top-shelf cocktail party conversation topics?  Not to diminish from the gravity of the Fiscal Cliff issue, but it's about that simple.  The Fiscal Cliff has now entered that sacred 2nd evolution of importance to markets where an issue goes from being "on the radar" to "within the confines of our current attention span."

After all, who would have room to pay attention to such things with juicy stuff like Greece (not to mention the broader Euro-drama, of course) and QE3 in the forefront.  Euro-drama persists.  QE3 interest fades.  And in the meantime, the presidential election seemed like an important thing to get through, especially because its outcome was likely to have some sort of implication on how the Fiscal Cliff would be approached.  Bottom line, we're there now, and yes, it's tedious.

Today's tedium is merely "headline potential," in that meetings between Obama and congressional leaders could potentially generate market moving headlines.  Equally possible is that we see a low volume, non-sequitur sort of day ahead of next week's light calendar and holiday shortness.  The point here is that the markets that move mortgage rates have participants that are real people, and next week is incredibly enticing for Fall/Winter vacationing or time-off as it has the unusual benefit of being the earliest possible day of November for Thanksgiving.  This leaves an entire week at the end of the month to get back to "month-end" business, which can be often be squished into the holiday week.

Apart from the Fiscal Cliff headlines that may or may not happen and the hypothetical holiday-inspired market dynamics which may or may not be relevant, there IS actually some data on the calendar today.  At 9:00am, we'll get a backwards look at how foreign countries bought and sold US Treasuries in September.  Not a big market-mover, but potentially interesting.  Then at 9:15, Industrial Production is expected to decelerate from 0.4% previously to 0.2% with Capacity Utilization remaining unchanged in October.