Commodity Market Decreased in April Amid Tapered Growth Expectations

     Commodity Market Decreased in April Amid Tapered Growth Expectations

PR Newswire

NEW YORK, May 8, 2013

NEW YORK, May 8, 2013 /PRNewswire/ --Commodities were lower in April as
economic data out of China and Europe supported expectations of continued
dampened economic growth.

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Nelson Louie, Global Head of Commodities in Credit Suisse's Asset Management
business, said, "Commodities decreased in April on the back of less than
encouraging GDP reports out of the US, China and Europe. Credit spreads of
periphery government debt have narrowed dramatically, likely in reaction to
incredibly expansionary central bank policies worldwide. The most striking
recent examples being Japan's commitment to even higher levels of quantitative
easing than in the US, relative to the size of the economy, and recent reports
of central bank equity buying. Certain central banks have made it very clear
they will err on the side of tightening later rather than sooner, and doing
too much rather than too little."

Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total
Commodity Return Strategy, added, "The sudden reduction in anxiety associated
with monetary easing, along with the diminution of imminent inflation fears –
inflation expectations have actually trended down over recent months – leads
us to believe that the chances of inflation over-shooting expectations have
increased. Monetary policies seem to have been a boon for stocks and bonds,
while commodities have been selling off. If economic growth is set to pick
up, as the US equity market seems to suggest, commodities may benefit from
increased demand."

The Dow Jones-UBS Commodity Index Total Return decreased 2.79% in April.
Overall, 16 out of 22 index constituents posted negative returns. Precious
Metals was the worst performing sector, down 9.57%, with both gold and silver
selling off sharply. Gold posted a loss amid fears of central bank sales due
to announcements that Cyprus might liquidate some of its gold to fund debt
payments. Investors also grew frustrated due to Gold's lackluster performance
over recent months, despite elevated European risks and increased commitments
to extraordinary loose monetary policies, most recently in Japan. Industrial
Metals declined, down 5.06%, as concern over global demand growth weighed on
returns. The International Monetary Fund trimmed projections for global
economic growth for this year and next to take into account sharp government
spending cuts in the United States and the latest struggles of
recession-stricken Europe. Energy also declined, down 1.46%, on worries about
global oil demand due to weaker-than-expected economic data. Livestock
decreased slightly, down 0.55%, as the unseasonably cold weather delayed the
expected increase in grilling demand for beef. Live Cattle led the sector
lower, while Lean Hogs was positive. Agriculture was relatively unchanged,
down 0.37%. Corn declined following the USDA's larger than expected estimate
for ending corn stocks at the end of March. Soybeans and Wheat increased as
deep snow pack in the US Midwest raised the risk of flooding and may delay the
spring plantings, while the winter wheat crop quality was also impaired.

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 April 30^th, 2013 the team managed approximately USD 10.9 billion in
assets globally.

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Certain risks relating to investing in Commodities and Commodity-Linked
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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SOURCE Credit Suisse AG

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