Official Chinese PMI survey data show conditions in China's aggregate economy remained steady but weak in June, with global trade tensions likely to be weighing on activity. The headline index for the CFLP manufacturing rose from 49.5 in May to 49.7 in June, indicating contraction for the third consecutive month, while the non-manufacturing PMI rose from 50.3 to 50.5, indicating very modest growth. The composite index covering the entire economy rose from 50.4 in May to 50.7 in June.

The headline index for the manufacturing and non-manufacturing PMIs were close to the consensus forecasts of 49.7 and 50.3 respectively. The RPI and RPI-P were unchanged at minus 7 and minus 10 respectively, indicating that data are coming in just below market expectations.

Not much change in business conditions is the call with PMI manufacturing expected at 49.7 in June versus 49.5 in May and services unchanged at 50.3 from May.

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.