Most traders are familiar with an economic calendar. But one question that pops up frequently is: how can we receive not only the data but also the analysis of the data in near real-time? If there is an embargo, before which the data cannot be released, then how do the news outlets already know all the details?

How the Consensus is Formed

Yesterday we had some tier-2 news from the UK and we shall use it as an example to illustrate how the flow of market moving news is constructed and released.


The first thing to understand is how the consensus print is formed. The consensus print  is the market’s expectation for the given data print. To obtain this, news outlets such as Reuters, Bloomberg, Market News International and FactSet contact around 50 top analysts or economists at major investment banks. Essentially the consensus print is formed via a survey.

The results are compiled into a range, and the median print is taken as the consensus. This also explains how consensus prints can differ slightly depending on the macro calendar you use: if the analysts surveyed are different, the results can be slightly different.

The analysts are surveyed typically one week prior to the release, so expectations are as current as possible.

The Embargo

On the day of the release, a selected analyst or pair of analysts from each news outlet is selected to report the story. They are led into a closed room within which they are given the details slightly ahead of time, so they can read through the details and extract the “juice” which will make up the headlines and the initial commentary which will then be released at the established time.

So for example, yesterday at exactly 10:30 CET one news service issed the following results:

-UK Aug Industrial production +0.2% m/m; +1.6% y/y
-UK Aug Manufacturing output +0.4% m/m; +2.8% y/y
-UK Aug Construction output +0.6% m/m; +3.5% y/y

and immediately after:

Industrial production expanded for the fifth straight month in Aug, […] Growth in the production of pharmaceuticals and metals drove manufacturing higher in  August, offset by a fall back in transport equipment and textiles.  […]  IOP is set to contribute positively to Q3 GDP growth, provided growth comes in higher than -2.5% m/m in Sep. Construction  would need to grow 1.9% m/m in Sep to avoid falling into recession.

These headlines and commentary are prepared by the reporters during the embargo period, so they can be released promptly when the embargo is lifted.

Machine Readable News

At this point, there is a significant difference between the news that retail traders can typically access, and the news that institutional traders can access.

Back in 2013, CNBC reported a contract signed by Thomson Reuters and the University of Michigan, which produces the widely cited UoM Consumer Confidence Survey. The contract apparently stipulates that the data will be distributed on a conference call for Thomson Reuters’ paying clients, who are given certain headline numbers 5 minutes prior to the official embargo lift (10 AM ET).

That’s not all: an even more elite group of clients, who subscribe to the “ultra-low latency distribution platform,”  receive the information in a specialized format tailor-made for computer-driven algorithmic trading at 9:54:58.

Machine Readable News seems to be a consolidated trend within the institutional world since data providers are offering these services now, and is one reason that even less influential news items might drive more volatility these days than in the past. In the past two months we’ve seen simple UK PMI data generate 40-50 pip moves. We’ve seen a CPI print generate a 60 pip move. And these dislocations are near-instantaneous.  Any retail trader trying to catch this will inevitably suffer from slippage and possibly get caught on the opposite side of the market, since knee-jerk reactions are frequently faded.

Can Retail Traders Still Trade The News?

Institutional traders receive the news earlier and can act earlier than any human being, through their automated programmes.  It would seem that there’s no possible way for retail traders to trade the news nowadays.

News trading can still offer decent odds, if you’re smart. What are the known odds?

  • the deviation from expectations: as a rule of thumb, a higher deviation generates more volatility;
  • the market’s reaction in the immediate aftermath should confirm the usual rule of thumb that says fundamentals and technicals should be in agreement;
  • the trend: single news events cannot flip a trend on it’s head – with the exception central bank meeting and NFP;
  • the news spike: if the market’s immediate reaction is a 100 pip jump, it may not be logical to expect much more immediate momentum.

So if you want to target news events, stay away from the initial knee-jerk reaction. Know the market’s expectations and understand what kind of deviation is at hand. Then, play the odds. When there is a strong catalyst at work, the event-influenced move can offer quite a decent ride.

Over to You

The macroeconomic events that get released through streaming news outlets are available thanks to the collective work of analysts, reporters and, of course, technology. It’s hard to imagine how the market movers became known across the globe in the pre-internet era!

Macroeconomic news, if approached in a robust way, can still offer satisfactory odds for retail traders on condition that:

  • you understand market fundamentals in the first place
  • you deal the known odds, and strike only when things make sense to you personally, based on your studies.

About the Author

Justin is a Forex trader and Coach. He is co-owner of, a provider of Forex signals from ex-bank and hedge fund traders (get a free trial), or get FREE access to the Advanced Forex Course for Smart Traders. If you like his writing you can subscribe to the newsletter for free.