NEW YORK, Sept. 13, 2017 /PRNewswire/
-- Commodities increased slightly in August due to a
tightening of base metal supplies, according to Credit Suisse Asset
Management.
The Bloomberg Commodity Index Total Return performance was
positive for the month, with 11 out of 22 Index constituents
posting gains.
Credit Suisse Asset Management observed the following:
- Industrial Metals gained 9.64% after reports of lower
production levels for Nickel and Zinc out of the Philippines and China, respectively.
- Precious Metals rose 4.01% due to increased safe haven demand
following missile tests by North
Korea.
- Energy increased 1.43%, led higher by Natural Gas, after
warmer-than-average temperatures across the majority of the US
increased cooling demand.
- Livestock dropped 6.18%. Lean Hogs decreased after the US
Department of Agriculture (USDA) reported that retail outlets' pork
advertisements declined over 25% by mid-August from the year
prior.
- Agriculture decreased 6.86%. The USDA's August World
Agriculture Supply and Demand Estimate report revealed increased
output forecasts for Wheat, Corn and Soybeans.
Nelson Louie, Global Head of
Commodities for Credit Suisse Asset Management, said: "Hurricane
Harvey halted production operations of several major oil refineries
located in the US Gulf Coast Region, effectively decreasing the
demand for raw crude oil. As a result, expectations for tighter
fuel supplies may help to support prices for petroleum products,
although lower economic activity during and after the hurricane may
decrease demand. The effects from Harvey, Hurricane Irma and other
storms may also impact agriculture commodities within the US. In
particular, while Harvey's heavy rains damaged some of the US
cotton crop out of Texas, the top
producing state in the US, its impact to global supplies were
minimal. However, the trajectory of future weather formations
affecting major areas may further tighten crop balances."
Christopher Burton, Senior
Portfolio Manager for the Credit Suisse Total Commodity Return
Strategy, added: "At the annual Economic Policy Symposium, US Fed
Chair Yellen maintained a dovish tone, which led to a drop in the
US Dollar as market participants anticipated decreasing odds for a
December rate hike. Meanwhile, Mario
Draghi, President of the European Central Bank (ECB), did
not give any indication as to when the ECB will begin the process
of tapering its accommodative quantitative easing policies. Markets
will now turn their attention to the September Fed and ECB policy
meetings for further clues on monetary policy normalization. As the
majority of central banks in the developed world remain committed
to loose monetary policy, the process of normalization may coincide
with periods of higher-than-expected inflation if global growth
surprises to the upside. In this market environment, commodities
would likely serve as a key portfolio diversifier as a hedge
against unexpected inflation."
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 August 31, 2017, the Team
managed approximately USD 8.6 billion
in assets globally.
Press Contact
Candice
Sun, Corporate Communications, +1 (212) 325-8226,
candice.sun@credit-suisse.com
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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
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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.
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