NEW YORK, July 17, 2017 /PRNewswire/ -- Commodities
declined in June amid increasing softs and crude supplies,
according to Credit Suisse Asset Management.
The Bloomberg Commodity Index Total Return performance was
negative for the month, with 12 out of 22 Index constituents
posting losses.
Credit Suisse Asset Management observed the following:
- Energy decreased 3.74%. Crude Oil and petroleum products
declined amid increased production out of Nigeria and Libya.
- Precious Metals dropped 3.12%, after US Federal Reserve (Fed)
Chair Janet Yellen's latest comments
increased expectations of a more aggressive shrinking of the Fed's
balance sheet.
- Livestock declined 1.88%, led lower by Live Cattle, after the
USDA reported beef production continued to come in above the five
year average.
- Agriculture increased 3.08% as hot and dry weather in the US
Northern Plains threatened the quality of the upcoming US spring
wheat crop.
- Industrial Metals gained 3.37% after markets received assurance
that the Chinese central bank remains committed to maintaining
economic stability while tightening credit conditions.
Nelson Louie, Global Head of
Commodities for Credit Suisse Asset Management, said: "Recoveries
of major economies seem to be moving in the same direction.
Reported manufacturing activity in the US and Europe remained in expansion territory, while
China returned to a slight
expansion in June, which may be supportive of base metals demand.
Consumer confidence levels in the US and parts of the Eurozone have
also increased. Despite these positive economic indicators, central
banks continued to be accommodative. Recently, the US Fed expressed
that any reduction to the federal balance sheet will be
deliberately slow. In addition, the Chinese central bank indicated
it will continue to attempt to support its economy as it tightens
credit conditions and shifts towards a consumer-driven economy,
easing concerns surrounding the country's pace of economic
growth."
Christopher Burton, Senior
Portfolio Manager for the Credit Suisse Total Commodity Return
Strategy, added: "Low energy prices have served as a drag on
inflation. Markets now are waiting to see how sustainable newly
restored production out of Libya
and Nigeria will be, along with if
other OPEC members will act to offset this increase in supply.
Industrial Metals continued to be influenced by labor disputes as
well as environmental-related restrictions on the production of
certain metals. In Agriculture, weather-related risks, or lack
thereof, remain the largest driver of returns for grains and softs.
As the Brazilian meat scandal and corruption probe widens, the US
may take up more beef market share due to it being viewed as a safe
supplier. Lastly, the demand for Precious Metals continues to be
influenced by the strength of the US Dollar and safe haven demand.
The trend of higher interest rates may hurt precious metals demand,
unless offset by greater inflation, while safe haven demand is
likely to remain intact."
About the Credit Suisse Total Commodity Return
Strategy
Credit Suisse's Total Commodity Return Strategy is managed by a
team with over 30 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 June 30, 2017, the Team
managed approximately USD 8.5 billion
in assets globally.
Press Contact
Candice
Sun, Corporate Communications, +1 (212) 325-8226,
candice.sun@credit-suisse.com
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