Commodity prices will continue to weaken in the second half of the year, amid slower demand from emerging countries such as China, analysts at Bank of America Merrill Lynch have warned. With credit and equity markets already hit by increased volatility and sovereign debt concerns, the warning will raise fears that profits at investment banks could struggle in the second half.

Francisco Blanch, global head of commodity research at Bank of America Merrill Lynch, said: "Market conditions are deteriorating and commodities will deteriorate slightly in the second half."