"I am not reading it."
Translation:Én nem olvasom.
In the choice of the definite conjugation olvasom rather than the indefinite olvasok.
Since the definite conjugation was used, there must necessarily be a definite third-person direct object: "him, her, it, that, the book, the newspaper, ....".
None was mentioned explicitly, so it's not "the book" or "that"; "it" is probably the best translation in English here.