With the Eurozone preparing its monetary repertoire to stave off a deflationary environment, the markets turned risk-off Wednesday on the economic uncertainty, pushing up Treasury bond exchange traded fund prices and pulling down benchmark 10-year yields to six-month lows.

The iShares 7-10 Year Treasury Bond ETF (NYSEArca: IEF) continued its rally Wednesday, rising 0.5%. IEF has increased 4.4% year-to-date.

The European Central Bank is preparing some options for its June meeting, such as cuts in all its interest rates and increased lending to small- and mid-sized firms, reports Karen Brettell for Reuters.

“The only reason that the Treasury market is bid this morning is a series of shifting expectations for European monetary policy,” Ian Lyngen, a senior government bond strategist at CRT Capital, said in the Reuters article.

The benchmark 10-year Treasury yield declined 9 basis points Wednesday to around 2.53%, the lowest since last October.

Technical positioning also helped support gains in Treasury bonds. Specifically, the benchmark yield traded between 2.6% and 2.8% for most of the year, but yields dipped below that level and tested a 200-day moving average Wednesday, which fueled a round of short-covering, reports Ben Eisen for MarketWatch.

With the continued strengthen in the Treasuries market, short sellers have been forced to close out their bearish calls and buy into the market.