Softer US and UK ISM manufacturing, softer Eurozone inflation

Research evidence excerpt

Softer US and UK ISM manufacturing, softer Eurozone inflation

FICC Research

Interest Rates

2 July 2026

Inflation-Linked Daily

Softer US and UK ISM

manufacturing, softer Eurozone

Jonathan Hill, CFAinflation

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jonathan.hill@barclays.comOur daily analytics package and commentary on global

inflation markets. BCI, US

Apostolos Apostolou

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US CPI: June ISM manufacturing softened, with pipeline cost pressures easing after recent apostolos.apostolou@barclays.com

declines in energy prices. Kevin Warsh noted that "expectations of inflation over the first four BCI, US

weeks of this period have come down" (Bloomberg, July 1, 2026). Real yields sold off on a carry-

adjusted basis on Wednesday: 2y +2.6bp, 5y +4.0bp, 10y +5.1bp, 30y +6.0bp. The breakeven

curve also sold off on a carry/RBOB-adjusted basis: 1y -3.4bp, 2y -1.8bp, 5y -0.5bp, 10y -0.2bp,

30y +0.1bp. Forward breakevens advanced: 1y1y -0.5bp, 2y3y -0.2bp, 5y5y +0.8bp, 10y20y +0.3.

Markets will have an early close today and are closed tomorrow, in observance of the July 4th

holiday. This week, we discussed a tactical long view, expressed via 5y5y CPI swaps. We also

examined the effect of AI on inflation.

EUR HICPx and FRCPIx: Headline inflation slowed to 2.8% y/y in June, below survey. As our

economists note, details point to declines across all major components. Eurozone

Manufacturing PMI was 51.4 vs. 51.3 survey. Brent fell to $71/bbl. Real yields steepened: 2y -7bp,

5y -3bp, 10y -1bp, 30y +3bp. Breakevens rallied in the front: 1y +5bp, 2y +6bp, 5y +4bp, 10y +3bp,

30y +0bp. HICPx also moderately advanced in the front: 1y +7bp, 2y +7bp, 5y +3bp, 10y +2bp,

30y +1bp. In forward space, 1y1y was 8bp higher and 2y3y 1bp higher. BONOSei26 will be

tapped today.