U.S. jobs statistics showed a tight labor market, Asian markets, and the dollar started the week higher in anticipation that the Federal Reserve will hike interest rates again next month.

MSCI’s broadest Asia-Pacific index outside Japan (.MIAPJ0000PUS) rose 0.12%, while Japan’s Nikkei (.N225) rose 0.5%. Easter closes Australian, Hong Kong, and European markets.

S&P 500 e-minis fell 0.02%, while Nasdaq 100 e-minis fell 0.25%.

The blue-chip CSI300 Index (.CSI300) fell 0.32% on Monday, while the Shanghai Composite Index (.SSEC) fell 0.16% amid escalating Taiwan Strait geopolitical concerns.

After meeting with U.S. House Speaker Kevin McCarthy in Los Angeles, Taiwan’s President Tsai Ing-wen returned to Taipei and announced three days of drills on Saturday.

On Monday, a Chinese aircraft carrier joined combat patrols surrounding Taiwan as Taipei reported another warplane influx near the island.

On Friday, the U.S. Labor Department reported that nonfarm payrolls rose 236,000 last month, missing the 239,000 predicted by experts in a Reuters poll.

The carefully anticipated report also indicated that annual wage rises slowed but still above the U.S. central bank’s 2% inflation objective.

Mansoor Mohi-uddin, the Bank of Singapore chief economist, said the labor market is too tight for the Fed to decrease inflation to 2% without more interest rate rises.

“Investors expect last month’s U.S. bank failures to compel the Fed to slash rates, but officials caution stubborn inflation will make policy improbable this year.”

The CME FedWatch tool now predicts a 66% possibility that the Fed will raise rates by 25 basis points at its May 2-3 meeting, up from 49.2% on Thursday before the data.

Investors will now watch Wednesday’s inflation data to determine the Fed’s price-fighting strategy. Wednesday will also see the central bank’s March meeting minutes.

Investors expect the March failure of Silicon Valley Bank to tighten credit conditions, raising recession concerns. As a result, traders increasingly believe the Fed will lower rates in the second half to avoid an economic slump.

Several analysts believe the Fed’s future course differs from market forecasts.

“Not alone should high inflation and a still-strong labor market keep cutbacks improbable,” Citi analysts said. “Yet continually too-strong inflation leads to future rises.” Citi forecasts three 25-basis-point rate rises.

After ending at 3.993% on Friday, the two-year U.S. Treasury yield fell to 3.951%. 10-year Treasury notes yielded 3.372%.

The spread between two- and 10-year Treasury note rates, a key economic indicator, was -57.7 basis points. Since July 2018, this curve has been inverted, predicting a recession.

The dollar index, which tracks the U.S. currency against six major counterparts, climbed 0.225% to 102.25 from last week’s two-month low of 101.40.

The Sterling fell 0.10% to $1.24, while the euro fell 0.06% to $1.0891.

When Kazuo Ueda replaced Haruhiko Kuroda, the yen fell 0.41% to 132.69 per dollar. On Monday, Ueda will conduct his first press conference.

Gold fell 0.8% to $1,992.35 an ounce. Gold futures decreased 0.95% to $1,992.80.

U.S. crude declined 0.09% to $80.63, while Brent fell 0.14% to $85.00.