Bloomberg Market Analysis

Introduction

This is an exercise about using the Bloomberg terminal. It uses the Bloomberg Market Concepts Terminal Basics course as a framework for looking at the disruption to UK financial markets caused by the mini-budget that was presented by Kwasi Kwarteng, the Chancellor for Prime Minister Liz Truss.

Finding the key dates

Search for news about Liz Truss and the mini budget. Identify the key dates for the budget. You can search by typing something like

News on UK fiscal plans Sep 2022

at the Bloomberg terminal command line.

The news items marked BN are from Bloomberg.

In general, if you are looking for current news you can search for quick views and opinion articles by using the QUIC and OPIN Bloomberg functions.

Assess the market impact of Liz Truss

Having established the key dates, use the GMM function in Bloomberg to assess the market impact of these events. Find a period that captures the delivery of the budget and the market reaction to the budget in the days that followed. Look out for weekends when the markets will be closed and market reaction will be muted, but note that larger reactions may be evident on Monday as investors digest the news that has emerged over the weekend.

Looking at key UK financial markets

Use the COUN Bloomberg function to get an overview of the UK. Drill down to the performance of the stock market, the bond market and the exchange rate around the time of the Truss Turmoil. Clicking on the charts will bring up a full screen version.

Look at Equity market, bond market and exchange rate charts

Assess the fall in the stock market and the pound. Calculate the percentage change for these using the annotate feature of Bloomberg charts. Look at the yield curve change over the period of the crisis. How much did UK borrowing costs increase? Was the increase in UK borrowing cost caused by Liz Truss? Compare the performance of UK bonds relative to those of US or Germany over the key period. For this you will need the WB or World Bonds Bloomberg function.

We can search for the generic 10 year UK bond. We can chart the intraday performance of the yield with the GIY Bloomberg function.

Economic data and bond calendars

This is less about economic data but consumer and business confidence may have been affected by the political events. We can look at the UK calendar to find what was happening to consumer confidence around the time of these events. Use the ECO, ECOS and ECOD functions. Find if there were any major economic surprises in the month after the mini-budget was delivered.