The Bloomberg Commodity Index Total Return decreased for the month, with 19 of 23 constituents posting losses.

Credit Suisse Asset Management observed the following:

• Livestock decreased 8.86% as escalating trade tensions between the US and China diminished the probability of higher US pork exports to China.
• Energy declined 5.70% following a weaker demand outlook for crude oil and petroleum products amid softening economic indicators globally.
• Agriculture fell 5.05%, led lower by Kansas City Wheat, as strong crop yield forecasts for Ukraine's 2019 wheat harvest increased global competition for US supply.
• Industrial Metals was relatively flat, returning 0.51%. Nickel gained after the Indonesian government announced that the initial start of January 2022 for a ban on all nickel ore exports would be moved forward by two years.
• Precious Metals increased 7.60% as new trade announcements between the US and China further strained relations, increasing safe haven demand for Gold and Silver.

Nelson Louie, Global Head of Commodities for Credit Suisse Asset Management, said: "The US-China trade war worsened mid-August with another bout of import taxes scheduled to take place in three waves between now and December. There is a possibility that the latter rounds may be scaled back or eliminated as both administrations indicated their intentions to meet in autumn to continue negotiations. The US administration also made symbolic statements towards negotiating in good faith at the recent Group of 7 Summit in France. Any meaningful move towards a resolution would likely impact commodity prices as exports of US agricultural goods may improve and industrial demand for base metals may rise. The potential for supply shocks in key commodity-producing regions such as the Middle East also remain despite some indications during the month that more diplomatic means of negotiation would return between the US and Iran."

Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total Commodity Return Strategy, added: "The trade war appeared to finally impact the US economy, as second quarter GDP slowed in comparison to first quarter's reading and as the PMI August reading fell to slightly below 50 for the first time since 2009. As a global slowdown takes hold and central bankers prepare for a moderating pace of global growth, the focus has slightly shifted to what stage the markets are in within the current business cycle. Many central banks have committed to trying to stimulate growth through more rate cuts and stimulus measures. China revealed that it may allow local governments to issue new bonds to support infrastructure investments. Supportive monetary and fiscal measures from various countries around the world may help economies soften the negative impacts from the slowing of international trade and consequently spur demand."

About the Credit Suisse Total Commodity Return Strategy

Credit Suisse's Total Commodity Return Strategy is managed by a team with over 35 years of combined experience, and seeks to outperform the return of a commodities index, such as the Bloomberg 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 August 31, 2019, the Team managed approximately USD 6.5 billion in assets globally.