London (CNN Business)The US jobs report for July was really good.
How good? Yields on benchmark US 10-year bonds moved higher to roughly 1.3% after the jobs report on Friday, their highest level since July 23.
Yields have since fallen back a bit. But the addition of 943,000 jobs in the United States is great news for the economy, making it more likely that the Federal Reserve begins to pull back its stimulus earlier than expected.
Continued momentum toward an eventual rate hike could drive yields even higher over the coming months.
"Friday's [jobs] data put Fed tapering back in the middle of the dinner table, sending US yields and the US Dollar higher," said Jeffrey Halley, senior market analyst for Asia Pacific at OANDA.
Another move: Gold prices crashed as much as 3.5% on Monday to $1,692.60 per ounce, before making a partial comeback. Silver also dropped.
Some of the strength of that reaction was likely due to thin trading volumes when Asian markets opened on Monday. But the jobs report also played a part, because higher yields make gold less attractive.
But that's not the whole story.
While investors are looking ahead to the prospect of the Federal Reserve pulling back stimulus, they must also consider other risks including trade headwinds and the continued spread of the Delta variant.
Over the weekend, trade data showed that export momentum eased in China in July, and could remain under pressure in the coming months.
"China's shipments are facing near-term headwinds from the recent spread of the coronavirus Delta variant and global supply-chain disruptions," wrote analysts at Oxford Economics.
Delta is the biggest problem. While the United States is unlikely to return to strict lockdowns that crush growth, the variant is forcing companies across the country to rip up their plans for the rest of the year.
And other countries could respond to Delta outbreaks with measures that take a bigger bite out of economic growth.
"Pandemic nervousness will ... temper spirits, particularly in China, where a rapid spread of the Delta variant would be a game-changer for the region's recovery outlook," said Halley.
For one concrete example of Delta nervousness, keep reading.
Saudi Aramco profits increase 288%
Crude oil prices have marched higher this year, boosting earnings at industry giants including BP, Shell and Exxon.
So it's not surprise that Saudi Aramco, the massive producer controlled by Saudi Arabia, delivered a bumper second quarter.
But, wow: Aramco's second quarter profit increased 288% over the same quarter last year to $25.5 billion. Profit for the first half of 2021 was $47.2 billion, roughly double the same period in 2020.
"Our second quarter results reflect a strong rebound in worldwide energy demand and we are heading into the second half of 2021 more resilient and more flexible, as the global recovery gains momentum," Aramco CEO Amin Nasser said in a statement on Sunday.
But, wait: Investors remain concerned about the Delta variant and weaker growth in China. On Monday, the price of Brent crude dropped as much as 3.8% before mounting a comeback.
"What are disturbing oil markets the most ... is the Delta-variant Covid-19 strain which has vast swathes of the planet in its grip," said Halley.
"That is increasing fears that the global recovery will stutter and become very uneven, thus reducing oil consumption even as OPEC+ continues to increase production," he added.