By Walter Brandimarte

NEW YORK, April 30 (Reuters) - A Standard & Poor's upgrade of Brazil's credit ratings to investment grade and another interest-rate cut by the Federal Reserve boosted emerging debt prices on Wednesday.

Prices of Brazil's global 2040 bonds <BRAGLB40=RR>, the most liquid emerging market paper, jumped 1.750 point in the afternoon, right after the country received its much-awaited "BBB-" rating from S&P.

Spreads between Brazil's debt and U.S. Treasuries, a key gauge of risk aversion, narrowed 8 basis points to 217 basis points, their tightest level so far in the year, according to the JP Morgan EMBI+ index 11EMJ.

Alberto Ramos, senior economist with Goldman Sachs, said he was expecting Brazil to be upgraded by S&P later this year, although the move "was deserved."

"In a very material way Brazil showed since August that it could navigate this international turbulence quite well," he said.

Prices of Brazil's bonds were modestly higher before the news, following an expected decision by the Federal Reserve to cut its benchmark interest rate by a quarter basis point. Some analysts say that might have been the last move of a U.S. monetary easing cycle that has increased the appeal of high-yielding emerging markets assets.

Overall emerging debt spreads widened 3 basis points to 267 basis points on the EMBI+, as emerging debt prices rose in general but were not able to keep up with a U.S. Treasuries rally.

Argentina's bonds also posted hefty gains, jumping more than 2.5 percent on the EMBI+, on hopes farmers and government will get into an agreement on export taxes, averting a new strike in the agriculture sector.

Argentina's yield spreads over Treasuries tightened 25 basis points to 559 basis points. Spreads had widened to more than 600 basis points on Friday after Economy Minister Martin Lousteau quit his job over disagreements with President Cristina Fernandez on how to fight inflation. (Additional reporting by Manuela Badawy; Editing by Leslie Adler)