NEW YORK, Dec. 12, 2016 /PRNewswire/ -- Commodities
increased in November due to higher economic growth expectations
and announced crude production cuts, according to Credit Suisse
Asset Management.
The Bloomberg Commodity Index Total Return performance was
positive for the month, with 13 out of 22 Index constituents
posting gains.
Credit Suisse Asset Management observed the following:
- Industrial Metals increased the most, up 10.33%, led by Copper.
The prospects for increased infrastructure spending in China and the US supported base metals
broadly.
- Energy gained 4.26%, as petroleum products gained following
announced production cuts by OPEC that came in above market
consensus. Natural Gas also rose, as forecasts for
colder-than-normal weather in December increased US heating demand
expectations.
- Precious Metals decreased the most, losing 7.99%, as data
continued to indicate the US economy was doing well enough to
tolerate some normalization of monetary policy, reducing the demand
for safe haven assets.
- Livestock ended 4.27% higher, led by Live Cattle, after the
USDA reported that placements in feedlots reached a record low in
November, decreasing US beef supply expectations.
- Agriculture ended 2.85% lower, led down by Coffee, as forecasts
for heavy rains in key coffee producing regions of Brazil led to improved growing
conditions.
Nelson Louie, Global Head of
Commodities for Credit Suisse Asset Management, said: "The
spotlight was on energy markets leading up to the November 30th OPEC meeting. As part of the agreed
upon deal, OPEC and non-OPEC members pledged to reduce global crude
production by 1.8 million barrels per day effective January 1, 2017 for six months. Compliance with
the cuts would likely bring global supply into deficit in the first
half of 2017, sooner than previously expected. Adherence to the
announced cuts will be instrumental for the medium-term outlook,
and actual producer behavior will be vital, including the reaction
of US crude producers, in terms of determining the efficacy of
OPEC's renewed attempt to manage markets. However, its recent
actions have already re-affirmed its relevancy and have at least
temporarily converted the global supply/demand balance from being a
headwind to a tailwind."
Christopher Burton, Senior
Portfolio Manager for the Credit Suisse Total Commodity Return
Strategy, added: "US inflation has increased from earlier this
year, no longer running below the US central bank's 2% target.
Markets have priced in another interest rate hike in December.
However, the Fed appears to have an appetite to let inflation
overshoot its set target for some time. While it remains to be seen
what agenda the new US administration will implement, early signals
indicate job creation and economic growth. These policies, which
may include tax cuts, an infrastructure spending bill and increased
defense budgets, could be inflationary, absent a sharp change in
monetary policy. Market participants appear to have begun to
reprice inflation risks due to these events. As one of the most
significant drivers of unexpected inflation risk, commodities as an
asset class could be valuable in the upcoming investment
cycle."
About the Credit Suisse Total Commodity Return
Strategy
Credit Suisse's Total Commodity Return Strategy is managed by a
team with over 29 years of experience, and seeks to outperform the
return of a commodities index, such as the Bloomberg Commodity
Index Total Return or the S&P GSCI Total Return Index, using
both a quantitative and qualitative commodity research process.
Commodity index total returns are achieved through:
- Spot Return: price return on specified commodity futures
contracts;
- Roll Yield: impact due to migration of futures positions from
near to far contracts; and
- Collateral Yield: return earned on collateral for the
futures.
As of November 30, 2016, the Team
managed approximately USD 9.0 billion
in assets globally.
Credit Suisse AG
Credit Suisse AG is one of the world's leading financial
services providers and is part of the Credit Suisse group of
companies (referred to here as 'Credit Suisse'). As an integrated
bank, Credit Suisse offers clients its combined expertise in the
areas of private banking, investment banking and asset management.
Credit Suisse provides advisory services, comprehensive solutions
and innovative products to companies, institutional clients and
high-net-worth private clients globally, as well as to retail
clients in Switzerland. Credit
Suisse is headquartered in Zurich
and operates in over 50 countries worldwide. The group employs
approximately 47,690 people. The registered shares (CSGN) of Credit
Suisse's parent company, Credit Suisse Group AG, are listed in
Switzerland and, in the form of
American Depositary Shares (CS), in New
York. Further information about Credit Suisse can be found
at www.credit-suisse.com.
Asset Management
In its Asset Management business, Credit Suisse offers products
across a broad spectrum of investment classes, including hedge
funds, credit, index, real estate, commodities and private equity
products, as well as multi-asset class solutions, which include
equities and fixed income products. Credit Suisse's Asset
Management business manages portfolios, mutual funds and other
investment vehicles for a broad spectrum of clients ranging from
governments, institutions and corporations to private individuals.
With offices focused on asset management in 19 countries, Credit
Suisse's Asset Management business is operated as a globally
integrated network to deliver the bank's best investment ideas and
capabilities to clients around the world.
All businesses of Credit Suisse are subject to distinct
regulatory requirements; certain products and services may not be
available in all jurisdictions or to all client types.
Important Legal Information
This document was produced by and the opinions expressed are
those of Credit Suisse as of the date of writing and are subject to
change without obligation to update. It has been prepared solely
for information purposes and for the use of the recipient. It does
not constitute an offer or an invitation by or on behalf of Credit
Suisse to any person to buy or sell any security. Any reference to
past performance is not a guide to future performance. The
information and analysis contained in this publication have been
compiled or arrived at from sources believed to be reliable but
Credit Suisse does not make any representation as to their accuracy
or completeness and does not accept liability for any loss arising
from the use hereof.
Certain information contained in this document constitutes
"Forward-Looking Statements" (including observations about markets
and industry and regulatory trends as of the original date of this
document), which can be identified by the use of forward-looking
terminology such as "may", "will", "should", "expect",
"anticipate", "target", "project", "estimate", "intend", "continue"
or "believe", or the negatives thereof or other variations thereon
or comparable terminology. Due to various risks and uncertainties
beyond our control, actual events, results or performance may
differ materially from those reflected or contemplated in such
forward-looking statements. Readers are cautioned not to place
undue reliance on such statements. Credit Suisse has no obligation
to update any of the forward-looking statements in this
document.
Certain risks relating to investing in Commodities and
Commodity-Linked Investments:
Exposure to commodity markets should only form a small part of a
diversified portfolio. Investment in commodity markets may not be
suitable for all investors. Commodity investments will be affected
by changes in overall market movements, commodity volatility,
exchange-rate movements, changes in interest rates, and factors
affecting a particular industry or commodity, such as drought,
floods, weather, livestock disease, embargoes, tariffs and
international economic, political and regulatory developments.
Commodity markets are highly volatile. The risk of loss in
commodities and commodity-linked investments can be substantial.
There is generally a high degree of leverage in commodity investing
that can significantly magnify losses. Gains or losses from
speculative derivative positions may be much greater than the
derivative's original cost. An investment in commodities is not a
complete investment program and should represent only a portion of
an investor's portfolio management strategy.
Copyright © 2016, CREDIT SUISSE GROUP AG and/or its
affiliates. All rights reserved.
Logo -
http://photos.prnewswire.com/prnh/20091204/CSLOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/commodities-increased-on-optimistic-global-prospects-300376491.html
SOURCE Credit Suisse AG