Commodity Market Decreased in September Amid Mixed Fundamentals

       Commodity Market Decreased in September Amid Mixed Fundamentals

PR Newswire

NEW YORK, Oct. 9, 2013

NEW YORK, Oct. 9, 2013 /PRNewswire/ --Commodities were lower in September as
decreased geopolitical risk and commodity-specific fundamentals weighed on the
market.

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Nelson Louie, Global Head of Commodities in Credit Suisse's Asset Management
business, said, "As of month end, headlines were focused on the US government
shutdown which began on October 1st. There is also heightened concern over a
potential failure to raise the debt ceiling on time, as well as unease
surrounding the ability of policymakers to reach a lasting solution when these
issues arise again towards the end of the year. Uncertainty on the fiscal
front may have been one obstacle standing in the way of the Federal Reserve
tapering its quantitative easing program at the September FOMC meeting. It is
possible that fiscal risks that are not fully resolved may lessen the chances
that the Federal Reserve tapers at either the October or the December FOMC
meeting."

Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total
Commodity Return Strategy, added, "Markets choppy during the summer amid
speculation that the Federal Reserve would begin the process of slowly
tightening its monetary policies. Removal of this risk in the near term may
be accommodative of risk appetite and further aid the economic recovery. It
may also increase already heightened risks of inflation eventually
overshooting expectations. Commodities have been increasingly driven by
commodity specific factors, helping to lead to reduced correlations. We
continue to expect commodities to provide valuable diversification benefits
amid heightened periods of uncertainty."

The Dow Jones-UBS Commodity Index Total Return decreased 2.55% in September.
Overall, 12 out of 22 index constituents posted negative returns. Precious
Metals ended the month 5.63% lower as geopolitical tensions in the Middle East
eased, decreasing the appeal of precious metals as a safe haven, and on
continued uncertainty surrounding the future of the US Federal Reserve's
monetary stimulus program. Energy declined 4.31%, with all sector components
lower. Natural Gas decreased as mild weather resulted in weaker-than-expected
shoulder season demand. Meanwhile, fading worries over tensions in Syria and
Iran helped ease risks to crude oil supply from the Middle East. Libya's
crude oil production recovered to nearly 40% of its pre-war capacity with
exports set to rise as major western fields ramped up output after protesters
agreed to reopen them. Agriculture decreased 1.94%. Corn, Soybeans and
soybean products declined amid favorable crop weather as the growing season
transitioned to harvest. Livestock was the best performing sector, up 1.70%,
led by Lean Hogs. Pork supplies remained tight due to reduced hog slaughter
relative to last year in the face of increased demand. The largest
contributor to demand growth has come from pork bellies, used to make bacon.
The USDA also reported increased beef and pork exports for July. Industrial
Metals increased 1.57%. The Federal Reserve's surprise decision to leave its
bond buying program intact supported base metals. This supported risk
appetite and emerging market growth expectations. Chinese industrial profits
were reported to be up sharply for August compared to the prior month and
year, which boosted demand expectations.

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 September 30^th, 2013 the team managed approximately USD 11.1 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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SOURCE Credit Suisse AG

Website: http://www.credit-suisse.com
Contact: Perrin Wheeler, Corporate Communications, tel. 212 325 8978,
perrin.wheeler@credit-suisse.com
 
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