J.P. Morgan said on Friday it raised its asset allocation recommendation for the sovereign bonds of Brazil and Turkey to "marketweight" from "underweight" as it raised its overall position on emerging market debt to "neutral" from "underweight."
The recommendation follows weaker-than-expected US jobs data released on Friday, which J.P. Morgan said improved the outlook for emerging debt.
Non-farm US payrolls rose just 32,000 in July, the government said on Friday in a report. Median forecasts were for a gain of 228,000.
The report rose doubts over how much the Federal Reserve will raise interest rates by the end of 2004, a major influence on the perceived value of emerging market bonds.
"The weaker US labour data suggests that the external environment is not as negative and is more uncertain than we initially believed," J.P. Morgan said in a statement. J.P. Morgan said it has not changed its view on the creditworthiness of either country.
Brazil and Turkey account for 23 percent and 8 percent respectively of the J.P. Morgan Emerging Markets Bond Index Plus (EMBI+), considered the asset class's benchmark index.