We have revised our view now in line with our Economics
team that Fed will likely raise target rate in Dec 2016. However, we
still see some risk of at least one 25bps move earlier in 4Q 2016. We
anticipate potential unwinding of carry trades as we proceed ahead to Sep
FOMC. We still see potential inflows into AXJs as markets search for
higher yielding plays amid a near-zero rate environment (in the developed
world). In the medium term, we favor IDR and INR.