Macroeconomic Uncertainty Weighed on Commodity Market in October

       Macroeconomic Uncertainty Weighed on Commodity Market in October

PR Newswire

NEW YORK, Nov. 13, 2012

NEW YORK, Nov.13, 2012 /PRNewswire/ --Commodities declined in October as
continued macroeconomic uncertainty weighed on markets generally.

(Logo: http://photos.prnewswire.com/prnh/20091204/CSLOGO)

Nelson Louie, Global Head of Commodities in Credit Suisse's Asset Management
division, said, "Hurricane Sandy, despite the extreme damage and tragic loss
of life, has passed with relatively little impact on commodity markets.
Ongoing macroeconomic uncertainty continues to be the biggest factor weighing
on the commodity markets. At the end of October, politics remained very much
in focus in two of the world's most important economies: the United States and
China. Uncertainty remains on what policies will be followed and how they
will impact the economy and markets. Both governments will oversee economies
in transition, trying to deal with structural challenges while maintaining
burgeoning economic recoveries. Neither political event will solve any long
term structural issues automatically, though increased certainty may be
supportive."

Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total
Commodity Return Strategy, added, "Continued quantitative easing in the US,
and accommodative monetary policy seen across most key markets, should
continue to support the appeal of hard assets as an inflation hedge. Signs of
improved economic growth in the US and elsewhere have not yet dampened central
bank enthusiasm for trying to stimulate economic growth, nor caused inflation
expectations to increase. Inflation expectations remain anchored at near
historic levels, with markets continuing to focus on weak economic conditions
and safety of capital, rather than on protection against the eventual impact
of prolonged, exceptionally loose monetary policy on inflation. We believe
investors will continue to benefit from the long-term diversification benefits
that commodities provide."

The Dow Jones-UBS Commodity Index Total Return was down by 3.87% in October.
Overall, 17 out of 20 index constituents posted negative returns. Livestock
was the best performing sector, with both Live Cattle and Lean Hogs trading
higher. Energy decreased 2.27% for the month. Crude oil and petroleum
products declined despite tensions between Turkey and Syria and lower output
at North Sea oilfields. Hurricane Sandy shut East Coast refineries, roads and
airports, reducing crude oil and fuel demand expectations. Natural Gas was
the best performing constituent within the sector, as excess storage levels
continued to moderate. Agriculture decreased 3.33%, with Coffee the worst
performer. Sugar also declined following reports of buyers in India and China
paying to cancel orders due to existing oversupply. Seasonal harvest progress
in the US and better prospects for Brazilian supply also weighed on Soybeans
and Soybean Oil. Precious Metals fell 3.90%. The latest Hong Kong demand
data, released for August, was weaker than the previous month and weaker than
expected. This added to worries that Chinese demand may ease. Industrial
Metals was the worst performing sector, falling 9.27%. Risk appetite weakened
amid worsening macro-economic sentiment. The lack of concrete resolution in
Europe and the World Bank's downgrade of its economic growth forecast for
China were contributing factors. Chinese manufacturing data did offer some
encouraging signs that activity may be beginning to accelerate.

About the Credit Suisse Total Commodity Return Strategy

Credit Suisse's Total Commodity Return Strategy has been managed for 18 years
and seeks to outperform the return of a commodities index, such as the Dow
Jones–UBS 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:

  oSpot Return: price return on specified commodity futures contracts;
  oRoll Yield: impact due to migration of futures positions from near to far
    contracts; and
  oCollateral Yield: return earned on collateral for the futures.

As of October 31, 2012 the team managed approximately USD 10.7 billion in
assets globally.

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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.

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