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Press release from PR Newswire

Commodity Performance Was Mixed In April, Fundamentals Remain Supportive

Monday, May 14, 2012

Commodity Performance Was Mixed In April, Fundamentals Remain Supportive09:47 EDT Monday, May 14, 2012NEW YORK, May 14, 2012 /PRNewswire/ -- Commodity performance was mixed in April, despite improving macroeconomic backdrop.(Logo: http://photos.prnewswire.com/prnh/20091204/CSLOGO )Nelson Louie, Global Head of Commodities in Credit Suisse's Asset Management division, said, "Over the past month, concerns surrounding China have begun to lift and have been replaced with renewed anxieties over the outlook for Europe, as well as apprehensions that the US recovery is losing steam.  However, prospects for global growth this year may be significantly more positive than at this time last year.  Leading economic indicators suggest we may be in store for more balanced growth between developed and emerging markets.  Stronger than expected global growth would be especially supportive of economically sensitive commodities." Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total Commodity Return Strategy, added, "As expected, the Federal Open Market Committee decided to keep policy unchanged in April, but reaffirmed its interest rate guidance.  With inflation expectations remaining well anchored, the likelihood of inflation overshooting expectations remains elevated.  Monthly IMF data demonstrated that central banks were active buyers of gold in March as they sought diversification away from US Dollar denominated reserves.  Commodities have historically tended to outperform during periods of higher than expected inflation.  We continue to believe investors will benefit from the inflation protection and diversification benefits of holding broad based commodities exposure within a portfolio of traditional assets."The Dow Jones-UBS Commodity Index Total Return was down by 0.42% in April.  Overall, 14 out of 20 index constituents decreased in value.  Livestock was the worst performing sector, down 2.99% for the month.  Weaker than expected domestic demand outweighed continued strong exports, further pressuring Lean Hogs.  Precious Metals decreased, down 1.46%, led by Silver.  Gold decreased slightly as Indian physical demand has been subdued amid a depreciating rupee and higher import duties.  Agriculture was also slightly lower, losing 0.34% for the month.  Grains were lower following USDA planting data, which showed 17% of Corn and 37% of Spring Wheat crops were planted compared to 5% for each at this time last year.  The rapid planting progress in the US can be attributed to warm weather and the early start to the spring planting season.  Energy was relatively unchanged, down 0.08%.  Natural Gas ended the month in positive territory after the Department of Energy revised downwards its previous four weekly injection estimates, helping to alleviate some of the pressure on bloated inventories.  Industrial Metals increased slightly, up 0.31%.  Copper was supported by South Korea's announcement that its central bank will buy $300 million of Chinese Copper stocks over the next three months.  Meanwhile, Copper inventories in London Metal Exchange-registered warehouses fell to their lowest levels since November 2008.  Shanghai Futures Exchange deliverable stocks also fell after building for most of the first quarter.  However, Copper ended the month down 0.08% after falling in the first half of the month on macro-economic concerns.    The Credit Suisse Total Commodity Return Strategy group periodically produces updates on relevant industry topics. For a copy of the team's white paper, "Commodities Outlook: Increased Volatility, Increase Opportunity?", please contact your Credit Suisse Relationship Manager.  About the Credit Suisse Total Commodity Return Strategy Credit Suisse's Total Commodity Return Strategy has been managed for 17 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:Spot Return: price return on specified commodity futures contracts; Roll Yield: impact due to migration of futures positions from near to far contracts; and Collateral Yield: return earned on collateral for the futures. As of April 30, 2012 the team managed approximately USD 10.8 billion in assets globally.  Credit Suisse AGCredit Suisse AG is one of the world's leading financial services providers and is part of the Credit Suisse group of companies (referred to here as 'Credit Suisse'). As an integrated bank, Credit Suisse offers clients its combined expertise in the areas of private banking, investment banking and asset management. Credit Suisse provides advisory services, comprehensive solutions and innovative products to companies, institutional clients and high-net-worth private clients globally, as well as to retail clients in Switzerland. Credit Suisse is headquartered in Zurich and operates in over 50 countries worldwide. The group employs approximately 48,700 people. The registered shares (CSGN) of Credit Suisse's parent company, Credit Suisse Group AG, are listed in Switzerland and, in the form of American Depositary Shares (CS), in New York. Further information about Credit Suisse can be found at www.credit-suisse.com.Asset Management In its Asset Management business, Credit Suisse offers products across a broad spectrum of investment classes, including hedge funds, credit, index, real estate, commodities and private equity products, as well as multi-asset class solutions, which include equities and fixed income products. Credit Suisse's Asset Management business manages portfolios, mutual funds and other investment vehicles for a broad spectrum of clients ranging from governments, institutions and corporations to private individuals. With offices focused on asset management in 19 countries, Credit Suisse's Asset Management business is operated as a globally integrated network to deliver the bank's best investment ideas and capabilities to clients around the world.All businesses of Credit Suisse are subject to distinct regulatory requirements; certain products and services may not be available in all jurisdictions or to all client types.Important Legal InformationThis document was produced by and the opinions expressed are those of Credit Suisse as of the date of writing and are subject to change without obligation to update. It has been prepared solely for information purposes and for the use of the recipient. It does not constitute an offer or an invitation by or on behalf of Credit Suisse to any person to buy or sell any security. Any reference to past performance is not a guide to future performance. The information and analysis contained in this publication have been compiled or arrived at from sources believed to be reliable but Credit Suisse does not make any representation as to their accuracy or completeness and does not accept liability for any loss arising from the use hereof.Certain information contained in this document constitutes "Forward-Looking Statements" (including observations about markets and industry and regulatory trends as of the original date of this document), which can be identified by the use of forward-looking terminology such as "may", "will", "should", "expect", "anticipate", "target", "project", "estimate", "intend", "continue" or "believe", or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties beyond our control, actual events, results or performance may differ materially from those reflected or contemplated in such forward-looking statements. Readers are cautioned not to place undue reliance on such statements. Credit Suisse has no obligation to update any of the forward-looking statements in this document.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.Copyright © 2012, CREDIT SUISSE GROUP AG and/or its affiliates.  All rights reserved.SOURCE Credit Suisse AGFor further information: Katherine Herring, Corporate Communications, +1-212-325-7545, katherine.herring@credit-suisse.com