US jobless claims at 7 yr low, inflation ticks up; Euro area recovery 'failed'; Japan posts sharp growth; UST 10yr at 2.49%; NZ$1 = US$0.864, TWI = 80.3

Here's my summary of the key news overnight in 90 seconds at 9 am, including news of more first quarter economic data coming through.

But first, the American inflation rate ticked higher in April and fewer filed claims for jobless benefits last week. In fact the seasonally adjusted unemployment claims number was the lowest in seven years - the raw unadjusted number fell even more dramatically.

The US economy does seem to be making good progress toward the Federal Reserve’s unemployment and inflation goals. Markets now expect the Fed to start raising rates in 2015.

This is despite the latest Federal Reserve data on factories showing a surprise fall in April. This and this region are doing well however.

Meanwhile, the euro-area recovery failed to gather momentum in the March quarter, as France unexpectedly stalled and economies from Italy to the Netherlands actually shrank.

Japan’s economy grew at the fastest pace since 2011 in the first quarter of 2014 as companies there stepped up investment and consumers spent ahead of their GST rise.

On Wall Street, equities have tumbled about 1% today with their biggest loss in five weeks as soft earnings from Wal-Mart Stores and continued weakness in the shares of small companies has kept investors on the defensive. Stocks in China a re falling too.

The UST 10yr benchmark bond yield is having another big fall, down another 5 bps and is now at 2.49%.

The oil and gold prices also fell, with gold back down below US$1,300 oz.

On the exchange rate, we start today with the NZ dollar marginally softer at 86.4 USc, the Aussie is at 92.4 AUc. The TWI is now at 80.3.

If you want to catch up with all the changes yesterday, we have an update here.

The easiest place to stay up with today's event risk is by following our Economic Calendar here »