Supreme Court Ruling – UK Government Must Have Parliament Approval to Trigger Brexit

If the markets were hoping that geo-political risk was going to take a back seat today, they would be disappointed however, with this morning’s Supreme Court ruling in the UK taking centre stage, the baton being temporarily passed across the pond.

The ruling was largely expected, a majority 8 to 3 ruling that the government is unable to trigger Article 50 without an act of parliament.

While the ruling provided initial support for the pound, cable jumping 0.33% to a high of $1.25326, the devil in the details weighed on the pound as details emerged, the pound sliding to a low of $1.24364 before settling at $1.248 levels at the time of the report.

As part of the ruling, the Supreme Court also judged that, while an act of parliament is required to invoke Article 50, the government is not required to consult devolved governments on triggering Article 50, the ruling unanimous.

The Supreme Court ruling was expected to leave the markets considering the prospects of a softer-Brexit, the pound currently pricing in a hard-Brexit at present, Theresa May’s objectives clear on Britain’s departure from the EU, which includes conceding access to the single market, the negatives.

Judging by the British Prime Minister’s decision to include parliament through the process, expectations were for the court to rule against the government.

With the degree of uncertainty now beginning to ease and the prospects of a positive meeting between the British Prime Minister and Trump coming at the end of the week, we expect the pound to continue finding support, the real issue now being noise from Scotland over today’s rulings, any talks of a referendum for independence a negative, though Scotland may want to sit back and monitor May’s progress before pulling the trigger.