The S&P China manufacturing PMI survey shows conditions in the sector weakened marginally in April, with the survey's headline index falling to 49.5 from 50.0 in March. Official PMI survey data published last weekend also showed weaker conditions in the manufacturing sector in April.

Survey respondents reported marginal growth in output and stable new export orders in April but a fall in total new orders, raising doubts about the sustainability of domestic demand after its initial recovery once public heath restrictions were eased. The survey also shows a second consecutive fall in payrolls but an improvement in business confidence. Respondents reported weaker price pressures, with the survey's measure of input costs falling in April for the first time in seven months and at the fastest pace since 2016. Selling prices were also reported to have been cut at the fastest pace since 2015.

Caixin's manufacturing PMI in April is expected to edge higher to 50.3 from 50.0 in March.

The S&P Manufacturing Purchasing Managers' Index (PMI) is based on monthly a questionnaire that surveys of over 500 companies which provide an advance indication of what is really happening in the private sector economy by tracking changes in variables such as output, new orders, stock levels, employment and prices across the manufacturing sectors.

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 S&P PMI 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.