UK: PM May got the parliamentary approval to formally trigger Article 50 - BBH

Analysts at BBH note that the UK Prime Minister May got the parliamentary approval the courts ruled was necessary to formally trigger Article 50 but it is not clear what UK she will lead out of the EU.  

Key Quotes

“Scotland is beginning the legal proceedings to hold another referendum on independence.  There is some talk that Northern Ireland, which voted to remain, might be allowed to rejoin the Republic of Ireland.”

“It is also not clear precisely when May will formally invoke Article 50.  Some expect Parliament to be told tomorrow during the Prime Minister question time in the House of Commons.  Others suspect May might wait until later this month for the EU Summit to celebrate its 60th anniversary, to formally begin the two-year amputation negotiations.  In any event, there is little uncertainty that Article 50 will be invoked before the end of the month.”

“Sterling has taken it on the chin.  Its two-day rally, the first since February 20-21, has ended with an exclamation point.  Sterling has been sold through the shelf it had carved out last week in the $1.2135 area to record its lowest level in nearly two months.  It found support in the European morning ahead of $1.2100.  We have been targeting the trend line off last October's flash crash low and the mid-January low.  It is found today near $1.2055.”

“For its part, the euro is trading firmly against sterling, but it has been unable to rise above the two-day cap near GBP0.8785.  The intraday technicals warn that if the euro is going to go through the GBP0.8800, it needs a running start, which means lower levels first.  A pullback toward GBP0.8730 should not be surprising.”