Le Lézard
Classified in: Mining industry, Oil industry, Business
Subject: SVY

Commodities Gained on Lower Supplies


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.  

Credit Suisse logo. (PRNewsFoto/Credit Suisse)

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:

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:

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, [email protected]

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'). As an integrated bank, Credit Suisse offers clients its combined expertise in the areas of private banking, investment banking and asset management. Credit Suisse provides advisory services, comprehensive solutions and innovative products to companies, institutional clients and high-net-worth private clients globally, as well as to retail clients in Switzerland. Credit Suisse is headquartered in Zurich and operates in over 50 countries worldwide. The group employs approximately 46,720 people. The registered shares (CSGN) of Credit Suisse'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 © 2018, CREDIT SUISSE GROUP AG and/or its affiliates. All rights reserved.

SOURCE Credit Suisse AG


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