Following the Norges Bank rate decision,...>

EURO-NOK: Following the Norges Bank rate decision, Morgan Stanley see limited

downside for the NOK as the Norges Bank have made it clear they will not

tolerate market volatility and will intervene in FX if required. MS see the

Norges Bank intervening for two reasons, namely funding fiscal expenditure and

managed FX volatility.

- On exchange rates, MS write that NOK carry is still attractive vs. EUR but not

the USD. MS write that in the near-term EUR/NOK should trade lower by 3-4%

before settling at around 10.70.

- MS recommend short GBP/NOK over the medium-term with the Bank of England still

to expand its balance sheet.