Halister News

(Bloomberg) -- Thursday’s High Court ruling on Brexit has spurred discussion about a flurry of possible “soft Brexit” scenarios but once investors realize a harder option is back in full play, sterling will fall again, Nomura analyst Jordan Rochester writes in client note.

• While the court ruling spurred speculation of a new vote, that’s not Nomura’s base case
• Expect a parliamentary vote to back beginning the Brexit process
• Were early elections to be called, would likely put an end to the possibility of a soft Brexit
• A snap election would only serve to improve the government’s majority in the house, strengthening the Brexit mandate
• GBP/USD could trade higher in coming sessions if position reduction into the U.S. elections continues
  • Eventually, pair will trade below 1.20 to 1.15; may have a floor above those levels for now as “false hopes” are likely persist