NEW YORK, June 11, 2018 /PRNewswire/ -- Commodities
rose in May as supplies were reduced due to higher temperatures and
increased demand.
The Bloomberg Commodity Index Total Return performance was
higher for the month, with 15 out of 22 Index constituents posting
gains.
Credit Suisse Asset Management observed the following:
- Energy increased 2.66%, led higher by Natural Gas, after
persistent above-normal temperatures throughout the US raised
cooling demand, slowing the pace of storage builds, which were
already running below seasonal averages since April 1st, the start of injection season.
- Industrial Metals rose 2.43%. Nickel gained as stockpiles
tracked by the LME and SHFE continued to fall and as Chinese
production of stainless steel increased.
- Livestock was 2.22% higher, led up by Lean Hogs, after the USDA
revised second quarter pork production forecasts down from the
previous month's forecast.
- Agriculture increased 0.58%, led higher by Cotton, which gained
as continued dryness in Western
Texas threatened crop conditions and reduced crop yield
expectations.
- Precious Metals declined 0.98%, led lower by Gold, despite a
rise in geopolitical tensions between the US and China as well as in Italy; these forces were outweighed by a
strengthening US Dollar.
Nelson Louie, Global Head of
Commodities for Credit Suisse Asset Management, said: "May was
marked by various policy changes from the US administration, which
affected commodity markets. Early in the month, the US reinstated
nuclear-related sanctions against Iran. It remains unclear on how exactly that
will impact Iranian crude oil production and exports in the
short-term. The threat of reduced exports from Iran added to existing bullish sentiment
regarding OPEC's overall greater-than-expected output cuts due to
the ongoing production shortfalls in Venezuela. In addition, rising energy prices
have contributed to higher inflation readings within the US and the
Eurozone in May compared to the year prior. As global energy demand
continues to grow and inventories shrink, crude oil may become more
susceptible to supply shocks, leading to potential periods of
greater-than-expected inflation."
Christopher Burton, Senior
Portfolio Manager for the Credit Suisse Total Commodity Return
Strategy, added: "Trade policies initiated by the US may have also
served as an inflation driver. The US ultimately decided to impose
steel and aluminum duties on key trading partners. Some countries
already imposed their own retaliatory duties on US agricultural and
industrial goods, while other nations are in the process of issuing
their own. In addition, trade relations between the US and
China worsened after the US stated
it would impose tariffs on $50
billion worth of Chinese goods. The threat of more tariffs
has increased inflation expectations globally while potentially
bringing down growth expectations. Meanwhile, US consumer
confidence levels gained in May, fueled by unemployment reaching
3.9%, the lowest level since December
2000. As consumer buying power increases and labor becomes
more expensive, inflation expectations may increase."
About the Credit Suisse Total Commodity Return
Strategy
Credit Suisse's Total Commodity Return Strategy is
managed by a team with over 32 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 May 31, 2018, the Team
managed approximately USD 9.4 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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should only form a small part of a diversified portfolio.
Investment in commodity markets may not be suitable for all
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