Commodities Decreased due to High Crop Supply Expectations and Reduced Safe Haven Demand

NEW YORK, April 10, 2019 /PRNewswire/ -- Commodities decreased slightly due to higher agricultural supply expectations and reduced safe haven demand for gold and silver.

The Bloomberg Commodity Index Total Return declined for the month, with 16 out of 23 constituents posting gains.

Credit Suisse Asset Management observed the following:

• Agriculture declined 2.22% as beneficial weather conditions and higher-than-expected planted acreage raised supply expectations for soybeans, coffee and corn on top of already strong inventory levels.
• Precious Metals decreased 2.00% as the US Dollar rose along with the US stock market, reducing demand for Silver and Gold as safe haven assets.
• Industrial Metals increased 0.90%, led higher by Zinc, as the global refined supply deficit persisted into its third year, as reported by the International Lead and Zinc Study Group.
• Energy rose 0.66%, led higher by Gasoline, as supplies decreased over the month. WTI Crude Oil and Brent Crude Oil also gained from tightening supply and demand fundamentals.
• Livestock gained 6.30%, led higher by Lean Hogs, due to reports of improving trade relations between the US and China, and the continued outbreak of African swine fever across China's hog herds. Both increased expectations of greater Chinese demand for US pork products.

Nelson Louie, Global Head of Commodities for Credit Suisse Asset Management, said: "The trade dispute between the US and China came closer to reaching its one-year mark by the end of March, with both sides potentially motivated to finalize a deal to support their respective economies. The two nations made progress towards forming preliminary terms, with a target date of arranging an extensive trade agreement by the end of April. If trade talks progress as planned, the US' agricultural and livestock industries may receive a boost in Chinese export demand by May. The current draft may even be beneficial to the US energy markets, with China potentially increasing imports of US LNG. The domestic natural gas industry may be facing potential production growth headwinds as exploration companies focus on improving profitability by reducing new capital expenditure projects. Even base metals demand expectations could recover quickly, potentially improving from better global growth prospects in the near term."

Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total Commodity Return Strategy, added: "The US economy appeared to remain resilient. Among recent economic highlights were an increase in new home sales year-over-year in February, near its strongest levels since the global financial crisis, and an unemployment rate that fell back down to 3.8%. However, the US ISM and Markit Manufacturing PMI figures were weaker than expected for February and seemed to indicate the manufacturing expansion may be cooling. The Caixin China General Manufacturing PMI reading for March returned to expansionary territory, surprising the market to the upside, potentially due to stimulus measures from their government. Meanwhile, the US Federal Reserve (Fed) indicated it was willing to remain patient and keep monetary policy looser for longer, rather than continuing to raise interest rates and risk being considered to be a major cause of a potential recession. The Fed even alluded that it may be willing to ease if needed as it keeps on eye on foreign growth prospects which would impact US growth. Even the European Central Bank (ECB) signaled that it may reconsider its stance on maintaining negative interest rates if economic data out of the Eurozone continued to soften. The Fed's and ECB's words and actions emphasize that the trend of more active central bank management of their respective economies is likely to remain."

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 March 31, 2019, the Team managed approximately USD 7.5 billion in assets globally.

Press Contacts
Candice Sun, Corporate Communications, +1 (212) 325-8226, [email protected] 
Andre Rosenblatt, Corporate Communications, +1 (212) 325-8230, [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'). 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 45'680 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.

SOURCE Credit Suisse AG

Related Links

http://www.credit-suisse.com