Commodity Market Increased Slightly in March Amid Mixed Macroeconomic
NEW YORK, April 10, 2013
NEW YORK, April 10, 2013 /PRNewswire/ --Commodities were slightly higher in
March despite uncertainty stemming from the Eurozone.
Nelson Louie, Global Head of Commodities in Credit Suisse's Asset Management
business, said, "The market's focus has been on risks stemming from Europe
along with emerging market demand concerns. The US equity market has largely
bucked these concerns and continued to move higher, choosing to focus on
encouraging domestic signs. US consumer confidence continued to recover, with
the March reading near its highest level since 2007. The housing recovery
continued to gain steam, with home prices higher for much of the country.
However, commodities have been more sanguine, keeping with the broader global
theme of higher risk aversion based on macroeconomic concerns."
Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total
Commodity Return Strategy, added, "Events in the Eurozone as well as
fluctuations in global growth expectations will continue to play a role in
commodity market movements. However, we remain concerned with the long-term
implications of ongoing monetary stimulus and its potential impact on
unexpected inflation risk."
The Dow Jones-UBS Commodity Index Total Return increased 0.67% in March.
Overall, 10 out of 22 index constituents posted positive returns. Energy was
the best performing sector, up 6.29%, led by Natural Gas on the back of
continued larger-than-consensus storage withdrawals. Weather forecasts
remained colder than normal, supporting heating demand. Precious Metals
increased 0.63%. The uncertainty of Cyprus solidifying a bailout deal with
the European Central Bank led investors to look to Gold as a safe haven,
though it also led to a higher US dollar. Industrial Metals was the worst
performing sector, down 4.53%, as events in Europe set the tone for base
metals over the course of the month. Caution emerged over a possible bank run
in Cyprus which weighed on the sector, as did speculation over weaker Chinese
demand. Agriculture decreased 2.43% following the release of the USDA Grain
Stocks report on March 28^th, which featured inventories at or above the high
end of consensus expectations for corn, soybeans and wheat. Livestock was
relatively unchanged, down 0.31%, due to mixed returns from sector
components. Live Cattle declined due to lower export expectations after
Russia implemented a ban on US beef exports. Corn trading limit down at the
end of the month also aided Live Cattle, as cheaper corn may reduce the near
term supply of cattle.
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
oCollateral Yield: return earned on collateral for the futures.
As of March 31^st, 2013 the team managed approximately USD 11.3 billion in
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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
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degree of leverage in commodity investing that can significantly magnify
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