investingLive Asia-Pacific FX news wrap: Asia opens higher, US-China trade optimism lift

• EU’s Costa says he shared strong concerns with China Premier Li
• China drops cautious tone as PBOC steps up yuan internationalisation
• China’s factory profits surge, but weak domestic demand clouds sustainability of recovery
• China premier: China willing to work with EU to keep bilateral relations on right track
• Ex-PBOC adviser calls for 2008-style 16 trillion yuan stimulus to boost demand
• Japan’s Kihara says important that currencies move in stable manner, reflect fundamentals
• China ready to build more stable, strategic partnership with Australia, Li tells Albanese
• China – Shanghai Composite Index hits a new 10-year high
• HSBC to book $1.1bn provision for Madoff-linked Luxembourg lawsuit
• China September industrial profits +21.6% y/y (prior +20.4%)
• PBOC sets USD/ CNY reference rate for today at 7.0881 (vs. estimate at 7.1146)
• Argentina’s President Javier Milei’s Freedom Advances party has won the mid-term election
• Recap – Japan’s service inflation quickens, reinforcing BOJ’s confidence ahead of meeting
• Japan’s Nikkei benchmark index has hit a record high, 50K+
• Gold is trading heavily in Asia with the US-China trade good news weighing
• Japan September Services Producer Price Index +3% y/y (expected +2.7%, prior +2.7%)
• U.S. flight delays worsen as shutdown fuels air traffic controller shortages
• ECB’s Escrivá signals extended policy pause as inflation meets target and growth diverges.
• Australia sues Microsoft, says Copilot rollout misled 2.7 million customers on pricing
• Preview – BOJ expected to hold rates as Takaichi’s fiscal tilt and U.S. risks weigh
• Australia FIX Conference 2025: ‘Everything Connected’ future finance
• Newsquawk Week Ahead: US-China trade talks, FOMC, BoC, BoJ, ECB and Aussie CPI
• Globex is open! US equity indexes jump higher on US/China trade deal positivity
• Heads up for those trading Europe and UK markets – daylight savings time change
• NZD / NZX traders note – it’s a New Zealand holiday today, markets are closed
• AUD and NZD jump higher on news of US-China trade agreement
• Bessent says China to resume U.S. soybean buys, delay rare-earth curbs as trade deal nears
• Iraq Zubair depot fire sparks conflicting reports on Basra crude exports
• Monday open levels, indicative FX prices, 27 October 2025. US/China tariff Pavlov Dog time
• Positive signs emerge of a US-China deal
• If Gandhi Lived in the Age of ChatGPT
• Trump: I am increasing tariff on Canada by 10% over and above what they are paying now

Positive signals from both Washington and Beijing over the weekend boosted hopes for a breakthrough in U.S.-China trade negotiations after two days of talks between top officials. Presidents Trump and Xi are expected to meet later this week to finalise the deal — the third such accord in the past nine months.

In early Asia trading, well before other markets opened, the Australian and New Zealand dollars jumped to two-week highs as risk appetite improved. Both economies are highly exposed to Chinese demand, and their currencies — particularly the AUD — often serve as liquid proxies for the “China trade.”

The move higher was not extended, despite additional support from the People’s Bank of China, which set the onshore yuan reference rate at its strongest level in more than a year. Chinese equities also gained, helping lift regional shares.U.S. equity index futures gained.

Fresh data added to the positive tone: China’s September industrial profits rose 21.6% y/y, the strongest since November 2023, after August’s robust 20.4% gain. Year-to-date profits climbed 3.2%, the best since August 2024, as Beijing’s efforts to curb excessive price competition bolstered margins.

Japan’s September services PPI showed inflation accelerating to +3.0% y/y, above both expectations and the previous +2.7%, underscoring persistent cost pressures in the service sector.

Elsewhere,

• Direct flights between China and India resumed after a five-year hiatus, marking a modest thaw in bilateral ties
• In the South China Sea, a U.S. Sea Hawk helicopter and an F/A-18F Super Hornet crashed in separate incidents on Sunday; fortunately, no injuries were reported. Investigations are underway.
• In Latin America, Argentina’s President Javier Milei’s Freedom Advances party secured victory in mid-term elections. The result, paired with the recent US$20 billion U.S. financial support package, is expected to provide a tailwind for Argentine assets.
• On the corporate front, Daiwa Capital Markets raised its Tesla price target to US$420 from US$300

Asia-Pac
stocks:

• Japan
  (Nikkei 225) +2.2%
• Hong
  Kong (Hang Seng) +0.9%
• Shanghai
  Composite +0.99%
• Australia
  (S&P/ASX 200) +0.38%

This article was written by Eamonn Sheridan at investinglive.com.