Bank of America: Emerging markets may welcome significant inflows of capital in early next year.

The US Bank said that with more and more signs showing resilience in emerging economies, there may be a larger scale of capital inflows into emerging markets at the beginning of next year, which will further drive funds away from US assets. "People will become more optimistic at the beginning of next year, as they will confirm that the impact of trade tensions on the economy will be limited," said David Hauner, head of global emerging markets fixed income strategy at the US Bank. "Even small-scale scattered investment flows from the US could have very significant effects." Hauner has maintained a bullish stance on emerging markets since the first quarter. He believes that this asset class will benefit from a weaker US dollar, still room for further interest rate cuts by central banks worldwide, and historically low allocations of global funds to emerging markets. Hauner said Brazil, Mexico, Colombia, Turkey, and Poland will be the main beneficiaries of foreign capital inflows.