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Press release from PR Newswire

Commodity Market Lower In May, Reflecting Broad-Based Declines Across Major Economies

Tuesday, June 12, 2012

Commodity Market Lower In May, Reflecting Broad-Based Declines Across Major Economies09:51 EDT Tuesday, June 12, 2012NEW YORK, June 12, 2012 /PRNewswire/ -- Commodity performance was negative in May, as fears regarding the ongoing Eurozone crisis and slowing growth momentum weighed on the market. (Logo:  http://photos.prnewswire.com/prnh/20091204/CSLOGO ) Nelson Louie, Global Head of Commodities in Credit Suisse's Asset Management division, said, "The end of May brought runs of economic indicators that were below market expectations.  In the US, the latest crop of sluggish economic statistics may lead to further accommodative policy efforts from the Federal Reserve.  With recent political changes in the Eurozone, it appears Germany may have to pay more attention to growth measures in addition to pushing for austerity.  Likewise, key emerging markets may be in a position to once again employ stimulus measures due to relatively healthy fiscal balances.  Brazil and India's central banks cut interest rates and China and Russia rolled out fiscal stimulus measures." Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total Commodity Return Strategy, added, "Further easing measures are likely to increase inflation expectations and the likelihood of inflation overshooting expectations.  This may be especially true should economic activity be more robust than expected.  Commodities have historically tended to outperform during periods of higher than expected inflation.  The uncertainty surrounding the European resolution has impacted, and may continue to impact, traditional asset classes and commodities differently.  We believe investors will continue to benefit from the long-term diversification benefits that commodities provide."The Dow Jones-UBS Commodity Index Total Return was down by 9.13% in May.  Overall, 17 out of 20 index constituents decreased in value.  Energy was the worst performing sector, down 11.12% for the month.  Mounting macroeconomic concerns surrounding Greece and peripheral European economies weighed on demand expectations for the sector.  Potential supply shocks remain possible with tensions in the Middle East remaining high.  However, markets were focused on downside risk scenarios during the month.  Agriculture decreased, down 9.89%, led lower by Cotton.  China Customs agricultural trade data for April were mixed, with China's Corn, Wheat and Cotton imports easing month-over-month while Coffee, Sugar, Soybeans and Soybean Oil imports were higher.  China's Corn imports fell sharply, while exports were up significantly, which meant China switched to being a net exporter in April for the first time since May 2011.  Industrial Metals declined 9.65%.  Copper dropped to its lowest levels since late last year, also weighed down by heightened global growth concerns, particularly regarding Europe and China.  Precious Metals also declined, losing 7.13%, as concerns about Greece and the Eurozone continued to dominate market sentiment after a European Union summit on May 23rd yielded few practical steps to manage the debt crisis.  Livestock increased 3.27% after the USDA reported cattle inventory below last year's levels and below expectations.  Lean Hogs continued to recover from previous declines, supported by strong export demand.                      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 StrategyCredit 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 May 31, 2012 the team managed approximately USD 9.7 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