NEW YORK, Feb. 12, 2019 /PRNewswire/ -- Commodities
increased as OPEC+ reduced crude oil production and as demand
expectations for industrial metals grew.
The Bloomberg Commodity Index Total Return increased for the
month, with 21 out of 23 constituents posting gains.
Credit Suisse Asset Management observed the following:
- Energy increased 9.22%. Saudi
Arabia and Russia were
voluntarily reducing production and exports while Libyan and
Iranian production also decreased.
- Industrial Metals gained 8.05%, led higher by Nickel, after the
Chinese government pledged additional stimulus measures following a
$29 billion tax cut plan for small
businesses, raising demand expectations for base metals.
- Agriculture was 3.04% higher for the month. Soybean Oil gained
as adverse dry weather conditions in Brazil hurt soybean crop growth during the
main grain filling season.
- Livestock declined 1.50%, led lower by Lean Hogs, as severe
cold weather in the US Midwest region closed some pork production
facilities, while also lowering pork consumption expectations.
- Precious Metals increased 3.23% as the US dollar weakened due
to higher market expectations for a slower trajectory in interest
rate hikes in 2019 by the Fed.
Nelson Louie, Global Head of Commodities for Credit Suisse Asset
Management, said: "At the end of 2018, OPEC and its allies agreed
to cut output by approximately 1.2M
bbls/day relative to October 2018
levels. So far, data for December
2018 suggests they are on their way to meeting their stated
objective. As markets continue to monitor compliance to the
agreement, ongoing geopolitical tensions may also play a role. US
sanctions on Venezuela's
state-owned oil company may potentially slow down the production of
refined products in the US, as Texas and Louisiana refineries, which typically process
heavier grades of crude from Venezuela, struggle to find alternative
supplies. In addition, as US sanctions on Iran remain in place, various European nations
have implemented a new trading mechanism, called the Instrument in
Support of Trade Exchanges, to continue doing business with
Iran. If the US deems this
mechanism in violation of its sanctions, retaliatory punishments
may be put in place. Any new trade barriers enacted by the US may
weaken global growth prospects."
Christopher Burton, Senior
Portfolio Manager for the Credit Suisse Total Commodity Return
Strategy, added: "There is currently concern in many global regions
about potentially slowing growth. Although British Prime Minister
Theresa May's separation plan was
rejected in January, both the UK and Eurozone are heavily
incentivized to find a resolution in order to avoid a hard landing.
Following a large drop in the Eurozone's industrial production
reading for November, the ECB noted that there are now more
downside risks to its economy. In China, effects from ongoing US-China trade
tensions continued to harm its economy as the National Bureau of
Statistics Purchasing Managers' Index for January revealed that
China's manufacturing activity
contracted for a second straight month. In the US, the Fed has
committed to maintaining a patient approach to future monetary
tightening. Central banks globally continue to seem more focused on
preventing headwinds from slowing down growth than they are
concerned about higher levels of inflation. Any upside surprises to
growth may also result in greater-than-expected inflation, which
should be supportive of the commodities asset class given its
historically high correlation to unexpected inflation."
About the Credit Suisse Total Commodity Return
Strategy
Credit Suisse's Total Commodity Return Strategy is
managed by a team with over 35 years of combined 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 January 31, 2019, the Team
managed approximately USD 8.0 billion
in assets globally.
Press Contacts
Candice Sun, Corporate
Communications, +1 (212) 325-8226,
candice.sun@credit-suisse.com
Andre Rosenblatt, Corporate
Communications, +1 (212) 325-8230,
andre.rosenblatt@credit-suisse.com
Credit Suisse AG
Credit Suisse AG is one of the
world's leading financial services providers and is part of the
Credit Suisse group of companies (referred to here as 'Credit
Suisse'). Our strategy builds on Credit Suisse's core strengths:
its position as a leading wealth manager, its specialist investment
banking capabilities and its strong presence in our home market of
Switzerland. We seek to follow a
balanced approach to wealth management, aiming to capitalize on
both the large pool of wealth within mature markets as well as the
significant growth in wealth in Asia
Pacific and other emerging markets, while also serving key
developed markets with an emphasis on Switzerland. Credit Suisse employs
approximately 45'560 people. The registered shares (CSGN) of Credit
Suisse AG's parent company, Credit Suisse Group AG, are listed in
Switzerland and, in the form of
American Depositary Shares (CS), in New
York. Further information about Credit Suisse can be found
at www.credit-suisse.com.
Important Legal Information
This document was produced
by and the opinions expressed are those of Credit Suisse as of the
date of writing and are subject to change. It has been prepared
solely for information purposes and for the use of the recipient.
It does not constitute an offer or an invitation by or on behalf of
Credit Suisse to any person to buy or sell any security. Any
reference to past performance is not necessarily a guide to the
future. The information and analysis contained in this publication
have been compiled or arrived at from sources believed to be
reliable but Credit Suisse does not make any representation as to
their accuracy or completeness and does not accept liability for
any loss arising from the use hereof.
Certain information contained in this document constitutes
"Forward-Looking Statements" (including observations about markets
and industry and regulatory trends as of the original date of this
document), which can be identified by the use of forward-looking
terminology such as "may", "will", "should", "expect",
"anticipate", "target", "project", "estimate", "intend", "continue"
or "believe", or the negatives thereof or other variations thereon
or comparable terminology. Due to various risks and uncertainties
beyond our control, actual events, results or performance may
differ materially from those reflected or contemplated in such
forward-looking statements. Readers are cautioned not to place
undue reliance on such statements. Credit Suisse has no obligation
to update any of the forward-looking statements in this
document.
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
volatile. The risk of loss in commodities and commodity-linked
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.
Copyright © 2019, CREDIT SUISSE GROUP AG and/or its affiliates.
All rights reserved.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/commodities-rose-on-tightening-crude-oil-inventories-and-higher-demand-expectations-for-metals-300793808.html
SOURCE Credit Suisse AG