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[Bloomberg Markets] [Forward Guidance] [FOLLOW US [Facebook Share]][Twitter Share] [SEND TO A FRIEND [Share with a friend]] Theresa May is expected to set out her vision for a hard Brexit in a speech this morning. The dollar is weakening against all its G10 peers, and Saudi Arabia says that OPEC production cuts can end in June. Brexit details U.K. Prime Minister Theresa May is due to give a speech at around 6:45 a.m. ET in which she will outline plans for Britain to [pull out of the European Union]. She will say that she has no interest in “anything that leaves us half-in, half-out,” according to extracts released by her office. The pound, which weakened following press reports about the speech over the weekend, was [trading at $1.2174] by 5:00 a.m. ET, a level close to Friday's close. Inflation data released this morning showed consumer-price growth increased to [1.6 percent in December], the highest level in over two years, and ahead of economists' expectations for a 1.4 percent increase. Weakening dollar The dollar declined against [all of its Group of 10 peers] and dropped against the yen for the seventh day, with that currency trading as high as 113.01 to the greenback. The acceleration in selling came after a Wall Street Journal story cited President-elect Donald Trump as saying the dollar was [already too strong]. The move has also seen gold rise to [$1214.39 an ounce] by 5:13 a.m. ET, its highest level since Nov. 23. Saudi's plan early exit Saudi Arabia says the agreed OPEC cuts can [end by mid-year], as the market rebalances. According to Bloomberg calculations, removing the production curbs when the current deal expires in June would not be enough to eliminate the entirety of the global stockpile-overhang. Saudi Arabia’s Energy Minister Khalid Al-Falih said that many countries are “going the extra mile” in making deeper production cuts. A barrel of West Texas Intermediate for February delivery was trading at [$53.28 by 5:22 a.m. ET]. Markets slip Overnight, the MSCI AC Asia Pacific Index [fell 0.4 percent], while Japan's Topix index dropped 1.4 percent as the yen rallied against the dollar. In Europe, the Stoxx 600 Index was [0.5 percent lower] by 5:21 a.m. ET as investors waited for May's Brexit speech. S&P 500 futures also [slipped 0.5 percent]. Davos The annual World Economic Forum meeting in Davos, Switzerland is underway this week, and among the early speakers is [Chinese President Xi Jinping], his country's first head of state to address the meeting. In an interview with Bloomberg this morning, UBS Group AG Chairman Axel Weber said that the mood at the meeting [was too gloomy], saying the possibility of worsening trade relations between China and the U.S. would be an opportunity for European countries. Here's what you should read today Odd Lots Podcast: How the big bull market in bonds [could come crashing down]. These are the world's [most innovative] economies. China's [oil collapse] is a gift to OPEC. Why Fed watchers think Janet Yellen is plotting [three hikes] this year. Deutsche Bank may withhold [90 percent of bonuses], according to reports. The ECB marks its [1,000th board meeting] with Tutankhamun and rhymes. The [Davos disconnect]. And finally, here’s what Joe’s interested in this morning Probably the biggest question facing investors this year is whether we're at the start of a bond bear market. We've seen rates rise and bonds sell off since the summer (a move that accelerated after the election), but it remains to be seen if this is the start of something big or just a short-term blip. Of course, another question is: If we do go into a bear market, how bad would it get? Well, here's a crazy fact. You know how when people talk about stock bull markets, they say things like: "We haven't seen a rally this long in over 10 years" or "valuations haven't been this stretched since the late 90s"? It turns out that when it comes to bonds, you have to go back over 500 years to see a bull market bigger than this one! That's according to Paul Schmelzing, who wrote a [brilliant post for the BoE's Bank Underground blog] about the nature of bond bear markets. Schmelzing breaks down modern bear markets into three categories: Inflation reversals (such as what we saw in the late 60s), sharp reversals (such as what we saw in 1994), and VaR shocks (such as what happened in 2003, when banks were forced to dump bonds to keep within risk limits). Not only should you read Schmelzing's post, but you should listen to the [latest episode of the Odd Lots podcast which I co-host along with Tracy Alloway], as we had him on as a guest and talked about how bad a theoretical bear market could get, and which historical examples might help to understand what could happen. You received this message because you are subscribed to the Bloomberg Markets newsletter. [Unsubscribe] | [Bloomberg.com] | [Contact Us] Bloomberg L.P. 731 Lexington, New York, NY, 10022