The Bloomberg Commodity Index Total Return performance was positive for the month, with 13 out of 22 Index constituents posting gains.

Credit Suisse Asset Management observed the following:

• Precious Metals increased 3.93%, with Gold and Silver rising amid the possibility of higher inflation due to new US fiscal policy, leading to increased demand for the sector as an inflation hedge.
• Industrial Metals gained 2.24%, led higher by Nickel. The Philippines continued to tighten environmental standards as it cancelled contracts for mining projects near watershed areas.
• Livestock was 1.26% higher, driven by Live Cattle. The US Department of Agriculture reported beef exports were 30% higher in December 2016 compared to the same period the year prior.
• Agriculture eased 0.28%, led lower by Coffee. Coffee supply expectations for Brazil’s main growing region improved as weather forecasts showed rains abating at the start of the harvest season.
• Energy decreased 2.72%, driven lower by Natural Gas. Natural Gas decreased as most of the US experienced abnormally warm temperatures throughout the month, dampening heating demand amid already ample inventory levels.

Nelson Louie, Global Head of Commodities for Credit Suisse Asset Management, said: "Initial compliance to the OPEC coordinated oil production cuts was high, helping to tighten global supply and demand balances. However, increasing US active rig counts grew US production to near 2016 levels. It is likely that OPEC will more frequently reassess the effectiveness of its output cuts as it seeks to stabilize prices at higher levels, yet remain cautious as its actions may bring about additional supplies elsewhere. Uncertainty as to whether OPEC will extend oil production cuts beyond June may derail plans by non-OPEC producers. With lackluster demand due to abnormally warm weather during the 2016/2017 winter heating season, the next catalyst for Natural Gas prices is likely US summer weather, as the potential for another El Niño event is steadily increasing. This event may also have the potential to impact agricultural commodities for future crop seasons."

Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total Commodity Return Strategy, added: "From a macro perspective, the US Federal Reserve is likely to raise short-term interest rates soon, as the US labor market comes closer to full employment and as inflation continues to rise near or above Fed targets. However, the path of subsequent hikes and the future of fiscal policy remain unclear in the US. Assuming fiscal expansion does materialize, economic growth expectations may accelerate, which is likely to be inflationary in an economy already near full employment and with prices increasing at fairly normal levels. Consumer inflation and producer prices in Europe continued to accelerate. In Japan, inflation levels remained weak but were positive in the latest reading for January. Commodities have historically tended to outperform during periods of higher-than-expected inflation and may serve as a good diversifier within an investor’s portfolio."

About the Credit Suisse Total Commodity Return Strategy

Credit Suisse's Total Commodity Return Strategy is managed by a team with over 30 years of 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 February 28, 2017, the Team managed approximately USD 8.8 billion in assets globally.