NEW YORK, Oct. 11, 2017 /PRNewswire/ -- Commodities
declined in September on weakening demand expectations for metals
and agricultural commodities, 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:
- Industrial Metals fell 3.75% on prospects of lower Chinese
demand and due to a stronger US Dollar, making base metals more
expensive to Chinese buyers.
- Precious Metals decreased 3.34% due to a strengthening US
Dollar and reduced save haven demand as tensions between the US and
North Korea slightly eased.
- Agriculture was flat for the month. Soybean Oil led the sector
lower amid lower demand expectations after the US EPA suggested it
may decrease the Renewable Fuel Standard biodiesel mandate.
- Energy increased 3.51% as crude oil and petroleum products
generally increased as US transportation and refining
infrastructure largely recovered following the impacts of
hurricanes.
- Livestock gained 3.57%, led up by Live Cattle, as domestic and
export demand for beef remained elevated in September. Lean Hogs
also rose due to continued strong export demand.
Nelson Louie, Global Head of
Commodities for Credit Suisse Asset Management, said: "Hurricane
Harvey severely impacted refining operations and the transportation
of crude and refined products in the US Gulf Coast region, home to
a significant portion of the United
States' energy infrastructure. Cotton crops in the US
Southeast were also slightly affected by these extreme weather
events. While conditions have not fully normalized as of the
beginning of October, at this point, it appears there will not be
lasting material supply shocks to energy or agricultural
commodities from the storms, though they certainly impacted prices
in September. Meanwhile, inventories of crude oil and petroleum
products have now largely normalized around the world, with one
notable exception being US crude inventories. With parties to the
OPEC member agreement continuing to restrict production, the US
should be increasingly called upon as the world's swing producer
and exporter. US exports for September continued to be strong."
Christopher Burton, Senior
Portfolio Manager for the Credit Suisse Total Commodity Return
Strategy, added: "From a macroeconomic standpoint, positive US
economic indicators, such as increased median household incomes and
upward revisions to second quarter GDP, helped spur the Fed to
continue with more hawkish signaling of another rate hike before
year end. However, uncertainty increased surrounding who will be
appointed the next Fed Chair, which in turn raised uncertainty
regarding the future path of monetary policy. In the Eurozone,
consumer sentiment indicators and second quarter GDP rose as well.
The ECB signaled it will begin talks to potentially reduce monetary
stimulus towards the end of 2017. However, there is still concern
surrounding the future for the Euro bloc, with unrest in Catalonia,
including a disputed October independence referendum, potentially
holding ramifications for Spain
and the region in general. In China, CPI grew while PMI remained in
expansionary territory. The economic status of these major
indicators all point to potentially sustainable higher
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 September 30, 2017, the Team
managed approximately USD 8.4 billion
in assets globally.
Press Contact
Candice Sun, Corporate
Communications, +1 (212) 325-8226,
candice.sun@credit-suisse.com
Credit Suisse AG
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Certain risks relating to investing in Commodities and
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markets should only form a small part of a diversified portfolio.
Investment in commodity markets may not be suitable for all
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