The yield on 30-year US Treasuries rose to 5.35%, its highest level since 2007. Higher long-dated yields feed through in turn to government borrowing costs and mortgage rates.

The August producer price index, released in the same period, was mixed by component. Energy-related items rose while some services categories eased, leaving no single direction to read from the whole.

Stock index futures fell immediately after the release, apparently reflecting a judgement that monetary easing could be delayed if prices do not fall as quickly as expected.

Larger bond issuance and shifting inflation expectations are cited together behind the rise in long yields. The two carry different policy implications and are worth separating.

Crude oil holding above 100 dollars a barrel further complicates the picture, since energy prices pass into producer prices relatively quickly.

Long yields also affect flows to emerging markets and exchange rates; a wider rate gap increases the pull of dollar assets.

Attention now turns to the consumer price index. Whether producer and consumer prices point the same way will settle how the market reads the picture.