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Danske Bank is not counting on moves in the EUR/DKK until the Danmarks Nationalbank increases rates after its FX intervention in January. 

Key quotes

“DN sold another DKK12.1bn EUR/DKK in FX intervention in January. The pair continues to trade close to the level that has triggered FX intervention in recent months and we expect it to stay here until DN hikes rates. Hence, more FX intervention and a 10bp rate hike is on the horizon.” 

“We think DN could afford to intervene for another DKK20bn before hiking rates, which means a rate hike is still 2 to 4 months away at the current pace of FX intervention. We now forecast DN to hike its policy rate 10bp to minus 0.65% in H1 this year.”

“Today, the Danish DMO plans to tap its 2y and 10y benchmark. We expect it to sell between DKK2.5bn and DKK3.0bn at the auction.”