NEW YORK, Jan. 10, 2018 /PRNewswire/ -- Commodities
gained in December as base metals and energy supplies decreased
while demand expectations increased, 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 9.16% on lower production and
increased demand expectations on the back of positive economic
growth indicators globally.
- Precious Metals rose 3.05% amid higher inflation expectations
and a slightly weaker US Dollar.
- Energy gained 3.90%, as pipeline disruptions in the North Sea,
the US and Libya tightened crude
further, while OPEC continued to comply with its production
agreement.
- Agriculture declined 1.49% as supportive weather conditions
allowed for supplies of most grains and softs to outpace
demand.
- Livestock decreased 0.70%, led lower by Live Cattle, due to
increased competition in the global export market, particularly
from Brazil.
Nelson Louie, Global Head of
Commodities for Credit Suisse Asset Management, said: "With the
help of increasing demand for oil, OPEC and its partners have
slowly brought down global supplies closer to the five-year
average. Their agreement, which potentially extends the cuts
through the end of 2018, may rein in supplies further in the coming
year. In 2018, markets will remain focused on compliance levels
from the parties to the agreement. However, if crude prices
continue to rise, this may enable smaller companies to grow
production as well. Environmental controls implemented in
Asia reduced production for most
industrial metals throughout 2017 as increasing demand, due to
improving global economic growth, outpaced refined supplies.
Meanwhile, disruptive weather failed to materialize during key
growing and harvesting seasons, allowing many agricultural
commodities to remain oversupplied. The increasing demand for
protein-rich foods globally should continue to shape what farmers
choose to grow, such as more planted soybeans versus wheat in the
US. In addition, US pork and beef production has increased
significantly compared to years past to meet rising demand."
Christopher Burton, Senior
Portfolio Manager for the Credit Suisse Total Commodity Return
Strategy, added: "Global growth continues to be strong, potentially
increasing commodity demand and inflation. Earlier in the year, the
Organization for Economic Cooperation and Development (OECD)
predicted the GDPs of all 45 countries it monitors would grow in
2017, backed by low interest rates, lower unemployment and elevated
consumer confidence. Some central banks, such as the US Federal
Reserve (Fed) and the Bank of England, have already begun to tighten
monetary policies, though largely accommodative stimulus measures
remain for both and for the rest of the developed world.
Additionally, China may relax some
credit controls in 2018 if it believes that recent central bank
liquidity restrictions to rein in some financial excesses also
created too large of a reduction in growth."
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 December 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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