It's a sea of red for Asian stocks and currencies on Friday

Charlie Bryan / Barcroft Images / Barcroft Media via Getty Images

It’s risk off in Asia, mirroring the performance on Wall Street overnight.

And it’s on the back of concern about the prospect for a US rate hike in less than two weeks time, something that has seen US bond yields and, as a consequence the US dollar, lift sharply.

Such an outcome was seen as an outlier only at the start of the week, and it’s the rapid re-pricing of rate expectation that has undoubtedly got investors nervous.

Depending on what gauge you look at, a rate hike on March 15 is now seen at around a 75% chance or greater.

It’s sea of red in Asian stocks, although the declines have not been massive as yet.

Australia ASX 200 5727.40 , -0.85%
NZ NZX 50 7154.77 , -0.29%
Japan TOPIX 1561.92 , -0.18%
Shanghai Comp 3211.73 , -0.57%
Shenzhen Comp 1992.88 , -0.24%
HK Hang Seng 23607.94 , -0.51%
Sth Korea KOSPI 2078.22 , -1.16%
Sinagpore STI 3109.82 , -0.85%
Taiwan TAIEX 9646.31 , -0.47%
Philippines PSI 7208.89 , -0.36%
Malaysia KLCI Index 1704.94 , -0.63%

And the US dollar is also bid, suggesting capital outflow from the broader Asian region. The Euro and Japanese yen are also outperforming, another sign of nervousness.

AUD/USD 0.7548 , -0.30%
NZD/USD 0.7043 , -0.27%
USD/JPY 114.24 , -0.12%
USD/CNY 6.9018 , 0.22%
USD/CNH 6.8942 , 0.14%
USD/HKD 7.7623 , 0.00%
USD/KRW 1154 , 0.35%
USD/SGD 1.4144 , 0.14%
USD/TWD 30.99 , 0.29%
USD/PHP 50.38 , 0.15%
USD/MYR 4.455 , 0.18%
USD/IDR 13377 , 0.15%
USD/THB 35.05 , 0.03%
USD/INR 66.76 , -0.12%
US Dollar Index 102.07 , -0.13%

Markets will be closely watching a key speech from US Federal Reserve chair Janet Yellen, along with comments from other Fed officials, for confirmation that a rate hike in March is a strong possibility.

“In US trade tonight we should hear near definitive confirmation of a near-term tightening with Fed members Charles Evans and Jeffery Lacker due to speak as part of a panel at 2:15am AEDT,” said Chris Weston, chief market strategist at IG Markets in Melbourne. “Then the generals of the Fed, Stanley Fischer and Janet Yellen should go some way to sealing the deal when they speak at 04:40 AEDT and 05:00 AEDT respectively.”

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