Morgan Stanley went short USD/NOK at the NY.....>

NOK: Morgan Stanley went short USD/NOK at the NY close on Thursday, with a stop

at NOK8.22 & a target of NOK7.50.

- MS note that "the Norges Bank's hawkish bias continues, with the bank guiding

markets toward a rate hike as soon as September. The previous decision to add

financial stability to its mandate & the reduction in the inflation target from

2.5% to 2.0% should keep the hawkish trend in place, particularly as house

prices appear to have reached a cyclical trough. Oil prices are likely to remain

supported as there is limited spare capacity in the global oil mkt, which should

support Norway's terms of trade & hence NOK valuation. Norway's current a/c

surplus & foreign asset position is also likely to keep NOK relatively supported

in an environment of declining global liquidity. Norwegian data remain robust, &

broad money supply growth has rebounded to the highest within G10, suggesting

continued tailwinds to growth. We choose to position against the USD as our USD

scorecard is pointing decisively toward USD weakness starting in mid-August,

suggesting more caution may be warranted on USD longs now. The key risk to the

trade is that the Norges Bank turns more dovish, causing NOK weakness."