Treasury securities are surging as reflected by tumbling rates. The yield on the 10-year Treasury note fell to as low as 2.5320% minutes ago from 2.6179% earlier today.

This is the lowest level in 7-months.

This comes even as today's producer price index report suggested that inflation is a bit hotter than expected. Typically, yields climb when inflation expectation rise.

So, what the heck is going on.

Stifel Nicolaus' Dave Lutz just blasted an email with a few theories:

Bundesbank headlines . "US yields are following German yields lower after those Bundesbank headers y'day, and 2 ECB speakers being dovish today," said Lutz. He's referring to Tuesday's WSJ report that said "Germany's central bank is willing to back an array of stimulus measures from the European Central Bank next month, including a negative rate on bank deposits and purchases of packaged bank loans if needed to keep inflation from staying too low, a person familiar with the matter said." This would be a major reversal coming from an organization that is notorious for being very tight about monetary policy."

. "US yields are following German yields lower after those Bundesbank headers y'day, and 2 ECB speakers being dovish today," said Lutz. He's referring to Tuesday's WSJ report that said "Germany's central bank is willing to back an array of stimulus measures from the European Central Bank next month, including a negative rate on bank deposits and purchases of packaged bank loans if needed to keep inflation from staying too low, a person familiar with the matter said." This would be a major reversal coming from an organization that is notorious for being very tight about monetary policy." Japan demand . "Japanese buying for the same reason as Germans," said Lutz. "Japanese yields are 1.95% lower than US. Pensions and lifers in Japan are thirsty for yield.

. "Japanese buying for the same reason as Germans," said Lutz. "Japanese yields are 1.95% lower than US. Pensions and lifers in Japan are thirsty for yield. China monetary policy . "Chinese buying as they depress CNY," said Lutz. "I understand they need to buy more Treasuries to offsetthe FX rebalance.

. "Chinese buying as they depress CNY," said Lutz. "I understand they need to buy more Treasuries to offsetthe FX rebalance. Positioning. "10y short interest futures (CFTC) data showing a very crowded short," said Lutz. "The crowd is rarely right, and now the squeeze is on."

Lutz noted that none of this really reflects a flight to safety.