The Fed has kicked off discussions on tapering its balance sheet and new dot plots are indicating two hikes by the end of 2023 (FOMC announcement (Jun): Getting more confident, 16 June 2021). The outlook on rates within Asia region, however, is still quite divergent. The monetary policy narrative has shifted sharply for Korea, with policymakers setting the stage for a policy lift-off in the not-too-distant future. Even though enough is priced at the very front-end of the curve, our preference is to have long-end flatteners, which have historically correlated well with monetary policy cycles. Other than Korea, it is fair to say that market participants are unconvinced of policy normalisation  elsewhere in Asia, as the still-high number of COVID-19 cases in several economies has dampened hopes of a speedy economic recovery. We are therefore still comfortable with selectively receiving rates such as in THB5yr NDIRS. The recent surge in COVID-19 cases in Indonesia could strengthen domestic banks’ bid for short-end IndoGBs to strengthen as credit growth slows further, but the conclusion is less straightforward for Malaysia, due to the possibility of another pension withdrawal scheme. In India, we close our NDOIS steepener trade idea and initiate a new trade idea to buy 10yr Gsec and pay 5yr NDOIS. With the recent expansion in the bond acquisition programme (GSAP), the central bank’s intent to anchor bond yields is clear. NDOIS is less likely to follow though, given that interbank rates are already very low in our view.