Bloomberg User Manual

School of Economics and Finance

Faculty of Business and Economics
University of Hong Kong

Chapter 2
Macroeconomic Analysis

Copyright © 2013 by School of Economics and Finance, University of Hong

Kong

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Chapter 2 Macroeconomic Analysis
Overview
In this chapter, we will delve into the details of how to look up and retrieve macroeconomic data
in Bloomberg; how to gain access to the economic forecast and surveys aggregated by
Bloomberg; and how to use Bloomberg to monitor economic news and further analyze economic
policies.

In Section 2.1, we will introduce how to search for historical macroeconomic data, followed by
economic forecast / survey data search in Section 2.2. Lastly, in Section 2.3, we will introduce
functions for economic monitoring tools including economic releases, news, central banks as
well as some specific topics in demographics, inflation and foreign investment.

2.1 Economic Data Finder

In this section, we will introduce the functions that you can utilize to search for historical
economic data. The functions that will be introduced are as follows:

Function Code Function Name

ECOF<GO> Economic Data Finder
ECST<GO> World Economic Statistics

ECOF<GO> displays economic data from a broad spectrum of economic indicators, from
national accounts, consumer prices to monetary and financial sectors. If you would like to look
for any specific economic indicator, the search engine ECOF<GO> would be your first choice.
In this page, you can either search by keyword(s) in the top amber search box or browse the
categories listed below.

For example, if you would like to study the unemployment rate of California, you can type US
UNEMPLOYMENT CALIFORNIA in the amber box and hit <GO> to search directly. A list
of all relevant tickers will be shown in the result page with brief description (ticker symbol,
current value, periodicity and etc.) at the top to help you identify the appropriate ticker you are
looking for. Alternatively, you can search by country and category, then narrow down: select the
region as 91) United States at the top right and select the category as 17) Unemployment under
16) Labor Market. In the result page, you can further narrow down by typing CALIFORNIA in
the amber box under Description.

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 Figure 2.1 Economic Data Finder: ECOF<GO>

Drag and Drop

Further Further narrow

narrow down down your
your search search by typing
by category keyword(s) here
here

Figure 2.2 ECOF<GO> result page

Once you find the right ticker in the result page, you can quickly load the ticker by dragging and
dropping it into the top command line (please refer to the section 1.8.3 Tips and Shortcuts for
details of the Drag and Drop feature). With the ticker loaded, you can run security-specific
functions to further analyze it, for example, DES<GO> to look at more detailed information of
the economic indicator, GP<GO> to view the historical values in graph and etc., all of which
will be introduced in the following chapters.

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 DES GP

Figure 2.3 Security Description Page: DES<GO> Figure 2.4 Security Historical Graph: GP<GO>

ECST<GO>, Economic Statistics, provides economic data with organization and context that
allows you to easily find the data you need through economic category hierarchies. Unlike
ECOF<GO>, ECST<GO> enables quick access to the data you care about most and displays
the data in a more systematic way for you to easily understand the data composition. You can
simply select region, date range, frequency and data transformation from the top amber boxes.
You can also compare multiple datasets in a graph by clicking chart icons for multiple indicators.
ECST<GO> is used when you need to view the most important economic indicators in different
categories for a country whereas ECOF<GO> provides all available tickers in each category.

Click to show
Detailed breakdown of GDP
the time-series
graph at the
bottom to
analyze the
historical trend

Figure 2.5 World Economic Statistics: ECST<GO>

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ECST<GO> provides the most important and quoted indicators in each category but not all the
tickers in ECOF<GO> which may not be very helpful if you would like to know the general
economic situation of a country. The function also provides the components of each important
indicator to give you a detailed picture for analysis. Moreover, the transformations of indicator
like QoQ% and YoY% save your time in searching for different tickers in ECOF<GO>.

2.2 Economic Forecasts / Surveys

In this section, we will introduce functions used for economic forecasts by market practitioners.
The functions that will be introduced are as follows:

Function Code Function Name

ECFC<GO> Economic Forecasts
ECOS<GO> Economic Estimates
WIRP<GO> World Interest Rate Implied Probability
FOMC<GO> Federal Open Market Committee Activities
GC<GO> Graph Curves
TAYL<GO> Taylor Rule Model
WCRS<GO> World Currency Ranker

ECFC<GO>, Economic Forecasts, displays the composite forecasts of worldwide key economic
indicators with the corresponding historical actual values as a time series to help you better
analyze the trend. You can customize your search by region, identity of the contributors and the
periodicity of the economic indicator being forecasted at the top panel of the page. It provides
more than 70 major countries’ and regions’ forecasts (Regional forecasts are calculated based on
the forecasts of the component countries weighted by nominal GDP). The page displays the
forecasts of next 3 years or 5 quarters if data is available.

You can click any forecast figure to view its details (Figure 2.7), including individual
contributors’ forecasts and statistical summary based on them such as mean, medium, highest,
lowest and Bloomberg weighted average.

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You can choose
other options in the
box to compare
indicators in Forecast
different countries, data are
e .g. “Regional in white
Comparison”
displays all the Historical
countries from the data are
selected region in in amber
the table to
compare their
historical value and
forecasts

Figure 2.6 Economic Forecasts: ECOF<GO>

Statistical
summary

Individual
contributor’s
information

Figure 2.7 ECOF<GO> detail page

ECOS<GO> provides full details of economist estimates for a single economic indicator.
Compared to ECFC<GO> which is an overview function displaying the economic estimates by
country, ECOS<GO> shows the forecasts of a specific economic indicator. Therefore, you may
need to load a ticker first, e.g. CPI YOY INDEX ECOS<GO>. It shows statistical summary
and estimates distribution chart at the top as well as estimate details by individual economists at
the bottom. The page provides similar information as ECFC<GO> but adds distribution chart,
historical estimates and economist ranking history. Moreover, ECOS<GO> categorizes the
forecasts by release date while ECFC<GO> displays them quarter by quarter or year by year.

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Choose different
tabs for more
ranking information

Choose release Estimates

date for historical distribution
estimate chart

Individual
estimates table

Figure 2.8 Economic Estimate of a specific indicator: ECOS<GO>

The estimates distribution chart are plotted in ECOS<GO> to provide a visual representation of
the degree of diversity of opinions among the forecast contributors. You can click any bar in the
chart to highlight the names of the economists whose estimates contribute to this value.

The individual estimates table below displays the names, firms, estimates, and ranks of the
economists for the selected indicator, which allows you to compare the ranking performance of
the estimate contributors. You can click any row in the table to see the estimate on a chart. You
can also click any of the column headers to sort the table, which allows you to search for and
compare economists by different criteria.

WIRP<GO>, the World Interest Rate Probability, shows the probability distribution of key
interest rate levels across the globe implied by the market value of relevant futures or options
contracts. You can choose an interest rate from the top amber box in Figure 2.9 including Fed
Funds, Euribor 3Mo, Sterling 90Day and etc. The probability chart below shows the instrument’s
probability distribution as of future interest rate level announcement dates which you can select
from right hand side of the table. The graph at the bottom displays the historical probabilities of a
certain interest rate level so that you can view how the probabilities have changed over the time.

The 2) Future Implied Probability tab displays the most likely path either in a future evolution
tree (for Fed Funds and Australian Cash Rate only) or heat map diagram (for other instruments)
in different probability levels to analyze the interest rates for different maturity dates. The Fed
Funds used as example in Figure 2.9 displays the future evolution tree with branches
representing different Fed Funds levels and corresponding probabilities for upcoming FOMC
announcement dates at the bottom.

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 Future Evolution Tree

Figure 2.9 World Interest Rate Probability: WIRP<GO>

FOMC<GO> shows the historical changes in monetary policy made by the Federal Open
Market Committee throughout the year and the corresponding reactions of the yield curve. You
can find the schedule of meetings of the FOMC, other Fed related options and functions listed at
the bottom of the page such as FOMC statements and minutes, Feb news and other central bank
rates. For example, by clicking 19) US TREASURIES DAILY YIELD CURVE, you will be led
to the page GC<GO> where you can plot the US Treasury Active curve and other yield curves.

Figure 2.10 Federal Open Market Committee Activities: FOMC<GO>

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 Click it to add
more curves for
comparison
Click any point on
the yield curve to
view the historical
values of that tenor

Figure 2.11 Graph Yield Curves: GC<GO>

TAYL<GO>, the Taylor Rule, estimates the direction of the Federal Reserve’s monetary policy.
Taylor Rule suggests that the Fed raises or lowers its policy rate (the Fed Funds Rate) according
to the gap between the inflation target and the actual inflation, as well as the gap between the
output target and the actual output measured by the level of unemployment relative to NAIRU
(the Non-Accelerating Inflation Rate of Unemployment). This page displays the Taylor Rule
estimate and current actual Fed Funds Rate on the left hand side, as well as the historical graph
comparison on the right hand side with the historical spread to examine the accuracy of the
model and to serve as your estimate reference. The lower part shows the equation of the Taylor
Rule with full flexibility to customize your inputs in amber boxes.

Choose
different
models if
you want
Taylor Estimate
vs. Actual Rate, as
well as the spread

Customize the
inputs in the
amber boxes if
you want

Figure 2.12 Taylor Rule: TAYL<GO>

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The bottom tabs in Figure 2.12 provides more insights of the model. For example, 2) Forward
Looking Est displays future Fed Funds Rate forecast, Taylor Rule forecast and Fed Funds
Futures to provide the indication of future Fed Funds Rate from different methods. 3) Model
Performance examines the accuracy of the model historically.

WCRS<GO>, World Currency Ranker, allows you to rank and compare currencies visually so
that you can easily identify, analyze, and understand Foreign Exchange (FX) market trends and
seize potential trading opportunities. WCRS<GO> provides a comprehensive FX picture by
allowing you to compare currencies based returns, interest rates, volatility, purchasing power
parity, carry trade, and credit default swaps. The sidebar allows you to select different rankings
so that you can analyze different FX performance measures. Rankings are grouped by category,
which makes it easy to find the ranking that is most relevant to your needs.

Figure 2.13 World Currency Ranker: WCRS<GO>

If you select 240) Purch. Power from the sidebar, you will see the overvalued / undervalued
currencies compared with the base currency selected, derived from purchasing power parity
using different methods including the Big Mac Index.

2.3 Economic Monitoring Tools

In this section, we would like to introduce some economic monitoring tools and specific topics
including economic releases, news, central banks, sovereign debt monitor, demographics,
inflation, foreign investment and BRIC. The functions that will be introduced are as follows:

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 Function Code Function Name
ECO<GO> Economic Release Calendars
TOP ECO<GO> Economic News
CENB<GO> Central Bank Finder
WCDM<GO> World Countries Debt Monitor
DDIS<GO> Debt Distribution
FCON<GO> Financial Conditions Monitor
GEW<GO> Global Economy Watch
WPU<GO> World Population and Unemployment
WFII<GO> World Foreign Institutional Investment
IFMO<GO> Inflation Monitor
BRIC<GO> BRIC Economies

2.3.1 Economic Releases and News

ECO<GO> provides access to economic calendars of upcoming economic releases and other
related events. You can use it to monitor real-time economic data releases which may have
impact on the market movement.

Set alerts for the

Customize your own
releases that you
economic calendar
are interested in
here to include the
countries that you
prefer
Once the actual
data is released,
you can easily
compare it with
the survey and
previous actual
data

Figure 2.14 Economic Release Calendars: ECO<GO>

You can choose a region and economic data type in the amber boxes on the top left hand side. In
addition, you can effectively customize your own economic calendar by clicking 1) Calendars
and selecting Add New Custom Calendar… from the drop-down box. Add the countries that you

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are interested in, name your calendar and 9<GO> to save it as default. You can also select 3)
Alerts to tick the releases that you are interested in when or before they are released.

Figure 2.15 is the event details page after clicking an event name in Figure 2.14. You can see the
basic information, historical charts of survey and actual data, as well as related news. You can
select different data to graph them for the historical surprise analysis.

Figure 2.15 ECO<GO> details page

TOP ECO<GO> shows the major economic news around the world. You can further refine the
news search by regions, markets and industries. It is a specific news category (Economy) in
N<GO> news overview page that we introduced in Chapter 1, thus sharing the same layout as
N<GO>.

Figure 2.16 Top Economic News: TOP ECO<GO>

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2.3.2 Central Bank and Sovereign Monitoring
CENB <GO> is a portal page of central banks across the globe categorized by regions. You can
click the name in the Portal column to access its Bloomberg page if available. If you click the
icon in the Website column, you will be directed to its official website.

Figure 2.17 Central Bank Finder: CENB<GO>

For example, People’s Bank of China (PBOC), Chinese central bank, is displayed as below. The
information has been divided into different sections with grey bars and blue titles. You can
quickly view the key indicators released by PBOC such as deposit rate and required reserve ratio.
You will find other related information such as PBOC Activities and China Interest Rates as well.

Figure 2.18 People’s Bank of China: PBOC<GO>

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 WCDM<GO>, World Countries Debt Monitor, displays a macro view of countries and their
financial conditions, including the amount of debt outstanding, CDS, sovereign ratings, currency
exchange rates, interest rates and the debt as percentage of GDP.

This column
Choose “Developed
shows the Debt
Markets” or
as % GDP
“Emerging Markets”
from here. For
European debt crisis,
please go to
CRIS<GO>

Figure 2.19 World Countries Debt Monitor: WCDM<GO>

By clicking the figures under Debt (MM), you will be directed to the country’s debt distribution
DDIS<GO> page (it will be discussed in details in Chapter 4). You can see the amount of
coupon or / and principal needed to be repaid for each period in both graph and table views.

Filter the debt

type as you
want in the
amber boxes Table view to
see the amount
of debt needed
to repaid each
year

Figure 2.20 Debt Distribution: DDIS<GO>

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FCON<GO>, Financial Conditions Monitor, provides you with tools to analyze US and
European financial conditions based on the Bloomberg Proprietary Financial Conditions Indices
which track the overall level of financial stress in the US / Euro Area money, bond, and equity
markets (for detailed information, please run BFCIUS INDEX DES<GO> or DOCS
2064812<GO>) and other indicators.

Financial Conditions Tables: display current values of the Bloomberg Financial Conditions
Indices and their components. You can click any row in the table to display a chart of historical
performance for the index or its components.

Financial Conditions Charts: display a graphical representation of the performance of the US

and European Bloomberg Financial Conditions Indices to view how it changes over the time.

Tables Charts

Figure 2.21 Financial Condition Monitor: FCON<GO>

The 62) Comparison/Events tab allows you to use a historical chart to compare financial
conditions indices and other indicators over a period of time, as well as visualize significant
events during the period to examine their impact.

The 63) Market Details tab displays a list of instruments in the Bloomberg Financial Conditions
Indices, as well as other related securities and allows you to compare performance over the past
52 weeks to the period before the 2008 financial crisis.

2.3.3 Specific Topics: Demographics, Inflation, Foreign Investment & BRIC

GEW<GO>, Global Economy Watch, displays and analyzes key economic data for countries
around the world. It provides a comprehensive global market overview of the major economic
players that helps you stay on top of economic data including GDP, CPI and unemployment rate
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that drives the markets. You can click any figure to load its corresponding ticker’s historical
graph.

Figure 2.22 Global Economy Watch: GEW<GO>

WPU<GO>, World Population and Unemployment, is the page to view the demographics and
unemployment rates of the major economic players around the world. It shows the percentage of
population aged over 65 years and under 15 years to give you an idea about the population
pyramid and trend. You can drag and drop any figure to load its ticker and run ticker-specific
functions to further analyze it.

Figure 2.23 World Population and Unemployment: WPU<GO>

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WFII<GO>, World Foreign Institutional Investment, tracks investment flows into the equity
cash markets across Asia. By allowing comparison of inflows and outflows of foreign investor's
money in US dollars across countries, WFII<GO> enables you to identify and analyze trends in
hot money flow which in turn impacts domestic equity market dynamics. It displays the amount
of money invested in the equity cash markets on day, week-to-date, month-to-date and year-to-
date basis across countries. You can click any figure to load the corresponding ticker.

Figure 2.24 World Foreign Institutional Investment: WFII<GO>

IFMO<GO>, Inflation Monitor, displays key price data, forecasts, central bank policy, and other
pertinent economic data and charts to track and study inflation. This combination helps you to
draw conclusions about where the inflation rates may go and what the implications are for future
monetary policy and economic performance.

Figure 2.25 Inflation Monitor: IFMO<GO>

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BRIC<GO> monitors economic conditions for the BRIC countries (Brazil, Russia, India and
China) so that you can better assess the risks associated with investing in these emerging markets.
The page presents information associated with equity market, foreign exchange market as well as
bond market in those four countries.

The top table displays the four countries’ key economic and equity market information for
comparison. Country Statistics Indicator below allows you to draw the charts of different
indicators from the amber box for selected countries. The table on the right hand side shows the
market movers of selected countries. The Forecast table shows the currency of primary equity
indices’ P/E of the four countries. You can also explore the related functions and news from this
page.

Figure 2.26 BRIC Economies: BRIC<GO>

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Exercise
1. Understand the definition and implication of Purchasing Managers Index (PMI) and how it
is constructed. Find the China Manufacturing PMI ticker.
2. Use ECOF<GO> to search for the unemployment rate of people aged under 25 in Greece
and Spain released by Eurostat respectively.
3. Use ECST<GO> to find the following China macroeconomic information:
a. Which industry (primary, secondary or tertiary) grew the fastest from Q4 2009 to Q2
2012 in terms of real GDP?
b. Which province contributed the most in China nominal GDP of Q1 2012?
4. Find the composite forecast of 2012 US real GDP growth rate made on 6/5/2012.
5. Find the differential of the unemployment rate forecast for 2012 between US and Euro Area.
6. Find the latest median estimate of China July 2012 CPI.
7. Find the Bank of Japan Overnight Target Rate and Australia RBA Cash Target Rate
respectively.
8. Identify the most overvalued and undervalued currencies as of 08/01/2012 according to the
Big Mac Index.
9. Identify which country has the highest debt/GDP ratio.
10. Find the amount of debt that Greece needs to repay in 2013 and 2014.
11. Identify which country has the most severe aging problem (largest portion of population aged
over 65)
12. Identify the reason why Hong Kong is not in the WFII<GO> page.

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