Sentiment was shaken by a sudden dive in gold as a break of $1,750 triggered stop loss sales to take it as low as US$1,684 an ounce. It was last down 1.4 percent at $1,738.

Brent also sank 2 percent on concerns the spread of the Delta variant would temper travel demand.

Holidays in Tokyo and Singapore made for thin trading conditions, leaving MSCI's broadest index of Asia-Pacific shares outside Japan down 0.5 percent.

Japan's Nikkei was shut but futures were trading 100 points below Friday's close. Nasdaq futures slipped 0.4 percent and S&P 500 futures 0.3 percent.

Read also: Asian stocks hold gains, dollar strong on Fed official comments

Chinese trade data out over the weekend undershot forecasts, while figures out Monday showed inflation slowed to 1 percent in July offering no barrier to more policy stimulus.

China's blue chips index were a fraction firmer.

The US Senate came closer to passing a $1 trillion infrastructure package, though it still has to go through the House.

Investors were still assessing whether Friday's strong US payrolls report would take the Federal Reserve a step nearer to winding back its stimulus.

"There is not a lot of disagreement on a taper announcement coming sometime between September-December followed by actual tapering sometime between November and January," said Rodrigo Catril, a senior FX strategist at NAB.

However, the pace of tapering was still up in the air and would decide when an actual rate hike came, he said. The Fed is currently buying $120 billion of assets a month, so a $20 billion taper would end the program in six months whilst a $10 billion tapering approach would take a year.

The spread of the Delta variant could argue for a longer taper with US cases back to levels seen in last winter's surge with more than 66,000 people hospitalized.

Figures for July CPI due this week are also expected to confirm inflation has peaked, with prices for second hand vehicles finally easing back after huge gains.

There are four Fed officials speaking this week and will no doubt offer their own take on tapering.

In the meantime, stocks have been mostly underpinned by a robust US earnings season. BofA analysts noted S&P 500 companies were tracking a 15 percent beat on second quarter earnings with 90 percent having reported.

"However, companies with earnings beats have seen muted reactions on their stock price the day following earnings releases, and misses have been penalized," they wrote in a note.

"Guidance is stronger than average but consensus estimates for two-year growth suggest a slowdown amid macro concerns."

Financials firmed on Friday as a steeper yield curve is seen benefiting bank earnings, while also penalizing the tech sector where valuations are sky high.

Yields on US 10-year notes were up at 1.30 percent in the wake of the jobs report, having hit their lowest since February last week at 1.177 percent.

That jump gave the dollar a broad lift and knocked the euro back to $1.1754, and briefly to its lowest since April at $1.1740. The dollar likewise climbed to 110.22 yen and away from last week's trough of 108.71.

Read also: Core inflation slows as emergency curbs hit demand

That took the US currency index up to 92.882 and nearer to the July peak of 93.194.

Oil prices eased further after suffering their largest weekly drop in four months amid worries coronavirus travel restrictions would threaten bullish expectations for demand. Brent fell $1.44 to $69.26 a barrel, while US crude lost $1.38 to $66.90.

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