Official Chinese PMI survey data indicate that China's economy expanded in March for the third consecutive month and at a faster pace, though this was driven by the non-manufacturing sector, with activity increasing at a slower pace in the manufacturing sector. Authorities relaxed public health restrictions late last year and today's data suggest the recovery in economic conditions has so far been uneven across sectors.

The headline index for the CFLP manufacturing PMI fell from 52.6 in February, its highest level since 2012, to 51.9 in March, just above the consensus forecast of 50.8. The CFLP non-manufacturing PMI survey's headline index, in contrast, rose from 56.3 to 58.2, well above the consensus forecast of 54.3 and reaching its highest level since 2011. The composite index covering the entire economy, the General PMI, rose from 56.4 in February to 57.0 in March.

The CFLP manufacturing PMI is expected to fall back to 51.8 in March versus February's 52.6, while the non-manufacturing PMI is expected to fall back to 54.3 after 56.3.

China Federation of Logistics and Purchasing (CFLP) Manufacturing Purchasing Managers Index (PMI) is the monthly survey of about 800 purchasing managers that is conducted jointly by CFLP and National Bureau of Statistics (NBS). The questions focus on the health of the manufacturing sector. The numeric result is a diffusion index. A reading above 50 indicates that manufacturing is growing. A reading below 50 indicates contraction.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures. The CLFP manufacturing data give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since the manufacturing sector is a major source of cyclical variability in the economy, this report has a big influence on the markets. And its sub-indexes provide a picture of orders, output, employment and prices. The survey tends to have a greater impact when it is released prior to the HSBC/Markit manufacturing PMI because the two reports are correlated.