Danske Remain "modestly Bullish" NOK

Danske note that "yesterday proved a very strong session for NOK FX driven by the external environment including the spike higher in oil and linkers/inflation proxies turning bid. In addition, the domestic story still favours a higher NOK and even if Norges Bank recently lowered the daily purchase amount, the underlying capital flows still imply a net demand for NOK (unlike prior to COVID-19). Domestic recovery continues, consumer confidence has rebounded, COVID19 still looks under control and we think the housing market should attract increasing market attention with Norges Bank closely monitoring the risk of financial imbalances building up (argument for faster rate hikes). All in all, we stay modestly bullish NOK but emphasise that the global environment remains key."