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Both the euro and franc paused from their rallies as a bit of risk appetite returned to the markets last week. Any chance they could recover this time?

Euro zone flash PMIs (Aug. 22, 7:15 am GMT)

It’s the third week of the month, which means another set of flash PMI readings from the euro zone! Now these are considered leading indicators of economic performance, giving traders an early look into how growth might fare and even how the central bank might react.

The earlier batch of flash PMI readings turned out mostly weaker than expected, leading market watchers to price in stronger odds of ECB easing or even an actual rate cut.

Another set of dips might be in the cards for the month of August, with France expected to print a decline in its services PMI from 52.6 to 52.5 and a drop in its manufacturing PMI from 49.7 to 49.5. Germany is also slated to show a fall in its manufacturing PMI from 43.2 to 43.1 and a drop in its services PMI from 54.5 to 54.1.

Overall, the euro zone flash manufacturing PMI is projected to decline from 46.5 to 46.3 and its flash services PMI could slip from 53.2 to 53.0. Not looking so good, eh?

Overall market sentiment

There are no top-tier catalysts from the Swiss economy, which might leave the franc extra sensitive to risk sentiment as in the previous weeks. In other words, safe-haven demand might drive traders towards the lower-yielding Swiss currency.

Trade tensions are still front and center these days, with the U.S. government seemingly unwilling to bend over backwards to strike a deal with China. At the same time, the uncertainty is already starting to take its toll in emerging markets, keeping traders wary of riskier holdings.

Then again, efforts to provide more economic stimulus by central banks seem to be keeping traders hopeful that growth could stay supported.