The overnight release of non-farm payroll data far exceeded expectations, prompting traders to reassess the Fed's interest rate cut path. JPMorgan Chase's stance on emerging market bonds has shifted from positive to neutral.
Considering the significant upside surprise in September's non-farm payroll figures and the risks posed by the November U.S. elections, JPMorgan Chase strategists Jonny Goulden, Saad Siddiqui, and others stated in a recent research report that they are maintaining a neutral stance on emerging market assets across the board, including currencies, corporate, and sovereign debt.
The report mentioned that the non-farm payroll data on Friday &#34;may have closed the window for entering emerging markets before the elections, and we are hedging our plans for emerging market risks.&#34; The report also stated that &#34;the risk premium for the U.S. elections is priced very low.&#34;
In early September, as the Fed began its rate-cutting cycle, the likelihood of rate cuts by central banks in emerging market countries increased. The emerging market bond index once saw its largest quarterly gain since 2020, prompting JPMorgan Chase to take a bullish stance on emerging market bonds

Considering the significant upside surprise in September non-farm payrolls and the risks brought by the November US election, JPMorgan Chase has shifted its stance on emerging market assets to neutral

- Recent non-farm payroll data exceeded expectations, prompting traders to reassess the Federal Reserve's interest rate cut path.  
- JPMorgan has shifted its stance on emerging market bonds from bullish to neutral, citing risks from the upcoming U.S. elections and strong job growth in September.  
- The report indicates that the non-farm data may have closed the entry window for emerging markets before the elections, with minimal pricing for the risk premium associated with the U.S. elections.

On September, non-farm payrolls unexpectedly strong, JPMorgan Chase: The opportunity for emerging market bonds has ended