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From raw data to your own analysis

The Sunday report does not tell you what to trade. It gathers the facts, current and in one place; the reading is yours to make.

What you get on Sunday

Every Sunday, the report brings together in one place what you would otherwise have to collect from five sources: what central banks have already priced in, what the week's data showed, and where the players tracked by the CFTC are positioned.

These are facts, not an opinion. You will find no recommendation, no entry level, no "bullish bias on the euro". That is deliberate: two traders reading the same figures do not have the same week ahead of them, and whoever hands you the conclusion stops you from learning to build it.

The two dates

The report mixes three horizons, and confusing them is the most common mistake.

The data describes a week that is already over. It is behind you when you read it, and the market has already seen it.

The trading period is the one starting. That is what you apply your reading to.

Positioning is taken at Tuesday's close and published on Friday. Anything that moved in between is not in it yet: a Thursday shock will only show up in the following report.

Reading a currency block

Each currency reads on three levels.

What the central bank is expected to do. This is what the market has already built into prices. A rate cut expected for weeks does not move the currency on the day it happens: what moves it is the gap between what was expected and what occurs. Hence the point of knowing what is expected before looking at what comes out.

What the data showed. Inflation, employment, activity. Taken alone, a figure says little; what matters is whether it confirms or contradicts what the central bank is expected to do.

Where the positions are. Positioning already stretched far one way makes the move fragile in that direction: there are few people left to convince, and many to push out.

Cross-asset

Long rates, gold, oil and indices are not there for decoration. A currency is a relative price, and it reacts to what happens elsewhere: bond yields say what the market pays to wait, risk appetite says which currencies money runs to or away from.

The same facts on a currency do not read the same way in a risk-on week and in a flight-to-safety week. Cross-asset is the backdrop you place the rest against.

Combining it with the week's news

This is where the report earns its keep, and it is the half nobody does for you.

The report tells you where things stand on Sunday evening. It does not tell you what will move them this week: that is the economic calendar and the news. The two together make a reading, neither one alone does.

An example. An inflation figure due on Thursday does not read the same way depending on whether the central bank concerned is already expected to cut or not. In the first case, it takes a real surprise to change anything. In the second, the same figure can open a move. The report tells you which case you are in.

And there is what is announced nowhere: a statement, a geopolitical flare-up, a surprise decision. That too is why the report does not conclude for you — its conclusion would be stale by Tuesday.

Reaching your own reading

Write it before Monday, in a few lines: the currencies you are watching, why, and what would change your mind. That last part is the most useful, because it forces you to name in advance what you will refuse to see in the moment.

Read it again at the end of the week, against what actually happened. After a few months you will know whether your readings hold up, and which ones: something no report, however accurate, can tell you in your place.

In My Trading Book

The report is published every Sunday, and you can keep your reading of the week next to the figures that prompted it, then find it again later against the trades it produced.

It is the same idea as the trading journal, applied to the week rather than the trade, and it is measured the same way: in multiples of the risk taken.