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Early drop set for ASX on US jobless data

A drop is expected at the opening of trade on the Australian share market after more signs the coronavirus crisis is worsening in the US, which prompted markets there to close lower.

The Australian SPI 200 futures contract was lower by 52.0 points, or 0.86 per cent, to 6010.0 points at 0800 AEST on Friday.

In the US, investors were surprised by data that showed jobless claims reached 1.416 million last week.

The increase of 109,000 claims broke a stretch of 15 consecutive weeks of improvements.

Congress kept working to pass more economic stimulus. Senate Republicans said they could present their version of the bill to Democrats as early as this week.

Total US coronavirus cases have topped 4 million, and there were nearly 2600 new cases every hour on average, according to a Reuters tally.

Technology stocks had the sharpest drops after a better-than-expected profit report from Microsoft failed to satisfy investors.

The Dow Jones Industrial Average fell 353.51 points, or 1.31 per cent, to 26,652.33, the S&P 500 lost 40.36 points, or 1.23 per cent, to 3,235.66 and the Nasdaq Composite dropped 244.71 points, or 2.29 per cent, to 10,461.42.

Other stock indexes around the world were mixed. Uncertainty across markets helped gold touch its highest price in nearly nine years.

In Australia today, Treasurer Josh Frydenberg will further detail the the economic task ahead of Australia during the pandemic in a speech to the National Press Club. This follows his budget update on Thursday.

Federal, state and territory leaders will have a regular national cabinet meeting to discuss the virus crisis and measures to cope. The prime minister is expected to front media afterwards to outline the talks.

The Australian dollar was trading at 70.96 US cents at 0800 AEST, lower from 71.52 US cents at Thursday’s close.

The US dollar dropped to a more than four-month low overnight as investors continued to sell the buck on expectations the US economy will underperform its peers due to the surge in coronavirus cases.

The Aussie dollar has been helped by demand for commodities including iron ore and copper.

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