Friday arrives (does it feel sooner than recent Friday's?) with little fanfare, at least not the kind that's on the schedule ahead of time.  There's a moderately small batch of European economic data in the overnight session as well vote on the Greek bailout in Germany's lower house of parliament.  No drama is expected with the vote, but if there were to be drama (or hints of future drama between now and the check signing), markets would probably care.

One thing markets obviously do care about is the Fiscal Cliff, and we saw ongoing evidence of this on Thursday as various Fiscal Cliff headlines garnered the lion's share of market movement.  But do politicians care?  Increasingly, the buzz--be it from talking heads in the financial news, market participants, and colleagues--seems to be reaching more  and more of a consensus that the people behind the headlines are simply engaging in political posturing on a grand stage.  This is absolutely possible--perhaps even probable--but it simply means that we're likely to see a toned down market-based response to each and every little headline and instead force the news to work a little harder before allowing it to cause as much volatility as it recently has.

As we've noted, bond markets have been better insulated from that volatility anyway, leaving equities as the kings of Cliff-Watch.  Although bonds are typically a cooler customer than stocks, there's an element of Fedspectations to keep in mind as well.  It got a bit lost in the hustle and bustle of the past few days, but WSJ's Hilsenrath says the Fed is likely to continue buying Treasuries in 2013, a fact that will likely be addressed in the FOMC Statement just under 2 weeks from now.

Apart from the bigger picture considerations, Friday contains a few pieces of economic data including Personal Incomes and Outlays ("consumer spending") and Chicago PMI at 8:30 and 9:45am respectively.  Fed Twist buying concludes a full week with another operation in 25-30yr space from 10:15-11:00am.  And last but not least, it's "month-end" for bond markets, meaning that there's a certain indeterminate amount of asset-allocation trading to be done as money managers adjust their portfolios to align with benchmark indexes.  This tends to be positive for bond markets, but the important point is that it adds yet another element to trading motivation that doesn't adhere to a schedule.  Vigilance is in order if you're on any fences with your pipeline heading into the weekend.