The outlook for global equity, interest rate and exchange rate markets has become increasingly uncertain, says Deutsche Bank's Washington-based chief energy economist, Adam Sieminski in his recently released Global Markets Research report. "We believe commodities will be unable to escape the contagion with the complex prone to overshooting risks both to the upside and downside. Our first concern is the precarious nature of global equity markets. If the U.S. continues to lurch from one crisis to another, it seems very probable that the S&P500 has further to decline in our view." He says the bank is concerned about the waning interest rate support for the U.S. dollar and the non-negligible risk that the dollar may hit new record lows into 2009, but it may provide further upside price risks to crude oil, which has become "mesmerized by the ebb and flow of the euro-dollar exchange rate." "However, from a commodity perspective our most pressing concern is to what extent the U.S. virus spreads globally and specifically to China. For many commodities such as aluminium and crude oil, China represents a significant share of global consumption growth. We expect demand destruction fears into early 2009 will bear down on many commodity prices," he says. In many markets, such as U.S. gas, oil, corn, soybeans, wheat and copper, he says price spike risks still lingers over the medium term, particularly in the event of an extreme weather event or a geopolitical shock.