Commodity Market Increased in January Amid Improved Macroeconomic Indicators

 Commodity Market Increased in January Amid Improved Macroeconomic Indicators

PR Newswire

NEW YORK, Feb. 12, 2013

NEW YORK, Feb. 12, 2013 /PRNewswire/ -- Commodities benefited from an uptick
in global growth momentum in January.

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Nelson Louie, Global Head of Commodities in Credit Suisse's Asset Management
business, said, "Commodities increased in January, against the backdrop of a
continued gradual improvement in global growth momentum, with the US data for
the month of December suggesting that the fiscal cliff had little impact on
spending. The Purchasing Managers Indices suggest that the fiscal cliff
resolution has seen business begin to increase production in many regions. In
addition to the positive data, risk appetite benefited from the decision by
the US Congress to delay the debt ceiling negotiations, removing the most
acute systemic risk that markets were expecting to face in the first

Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total
Commodity Return Strategy, added, "Over the year ahead, the rate of global
growth will likely once again be a key to commodity performance, as will
continued low interest rates. As expected, the January Federal Open Market
Committee statement contained minimal changes relative to the December
meeting. Inflation may overshoot expectations, which remain near the Fed's
target of 2%, if economic activity begins to pick up more robustly than
expected. Commodities have historically tended to outperform during periods
of higher than expected inflation. We believe investors will continue to
derive long-term diversification benefits that commodities provide."

The Dow Jones-UBS Commodity Index Total Return was up by 2.40% in January.
Overall, 18 out of 22 index constituents posted positive returns. Energy was
the best preforming sector, up 3.42%. WTI Crude Oil posted slightly stronger
gains than Brent Crude Oil. The Seaway pipeline was expanded, allowing more
crude to move from Cushing, Oklahoma to the Gulf Coast, where it can be sold
at higher prices. Agriculture increased 3.08% on the back of colder weather
in the US Midwest which could threaten grain production. Soybeans was
supported by US demand, which continues to be strong. Corn also increased
following the latest World Agriculture Supply and Demand report. The USDA
reduced its ending inventory estimate below expectations, due to increased
feed usage and export expectations. Wheat increased slightly after
Argentina's agricultural ministry cut its wheat production forecast, citing
extreme weather as the reason for the decline. Industrial Metals gained
2.29%, supported by signs of improving global growth. Precious Metals was
relatively unchanged, up 0.20%. While upbeat economic data from the world top
economies weighed on Gold, Silver still seemed to benefit from expectations
the Federal Reserve would continue its monetary easing policies. Livestock
was the worst performing sector, down 1.31%. While Live Cattle led the sector
lower, Lean Hogs posted a slight increase. The USDA Livestock Slaughter
Report for December showed reduced lean hog supplies relative to November and
December 2012.

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 January 31^st, 2013 the team managed approximately USD 11.6 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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