Aug. 11 (Bloomberg) -- Credit Suisse First Boston, the investment-banking arm of the second-biggest Swiss bank, increased its recommendation for Brazilian bonds on the prospect that the country's debt may be upgraded by rating companies as the economy expands amid a slowdown in inflation.

Brazil's trade surplus ``continues to surprise positively'' and the inflation rate is slowing, which may lead to a decline in interest rates, Filippo Nencioni, global head of sovereign-debt strategy at CSFB, wrote in a report.

``We believe the benefits of solid economic fundamentals strongly dominate the risks associated with the recent political crisis,'' Nencioni and a team of analysts wrote in the report.

CSFB also cut its recommendation for Turkey's bonds on concern over the country's accession negotiations with the European Union. The firm raised its recommendation to Peru's bonds to market weight, from underweight.

To contact the reporter on this story: Elzio Barreto in Sao Paulo at ebarreto@bloomberg.net

Last Updated: August 11, 2005 08:10 EDT