143 the ceiling for the Bund?

As we go ever higher in government bond futures, the Bund tried staying above 143 for a third time today, but again it buckled and now we trade mid 142s. Its no surprise as a yield of 1.5% in the Bund is pushing the boundaries of what is really worth wile. The push higher was in part to the usual problems in Europe, as well as weaker PPI numbers out the US. Further was the news that JP morgan may lose 2 billion in a HEDGE gone wrong! This wiped 9% of the share price as I write. Spreads in the STIRS have been edging down today back to its lows in the red months as we come back down from yesterdays pop up. It was quite frustrating as I was short everything as we kept rising yesterday and ended up scratching pretty much to then see it come back lower today. But this is the game. Today I went long 3s and then 2.5s in Mar13Jun13 and got out at 3s, and went long 4s and 3.5s in Jun13Sep13 and got out at 4s for a marginal gain on the day. With European woes, the relationship between the Bund, bobl and shatz with the euribor has flipped. As we go higher in those contracts we are coming off in the front months in the Euribor as credit risk grows. Using the shatz as a gage of where the Bor is going isn't working of late, so just relying on good old spread ranges. If credit conditions deteriorate we will go negative for all these spreads, so I will be careful going long if Spain's debt conditions to get worse. Next week on Wednesday we have the UK inflation report which could be very interesting as the BoE have said they are worried about inflation, so hopefully this will provide some good volatility. Have a good weekend!