Trade talks back from the dead

In a turnaround from a week of deadlock, the U.S. and 6 other key nations began to talk about possible success at the World Trade Organization talks. Officials said progress has been made on trade for both agriculture and industrial goods between developed nations and emerging economies. It includes a further cut to the cap on U.S. farm subsidies, a source said. WTO’s chief had voiced concerns earlier Fri. that the long-running Doha round may collapse. An anti-trade Congress would have to approve any deal.

Euro zone loan growth declines

The economic downturn took a heavy toll on bank lending in June in the 15-nation currency bloc, as loan growth fell to its slowest pace in more than 2 years. The growth in M3 money supply, which includes cash in circulation, short-term bank deposits and money market instruments, cooled more than forecast to an annual 9.5% from May’s downwardly revised 10%, the European Central Bank said. Loan growth to the private sector fell to 9.8% from 10.5%.

Canada’s budget had a deficit of $507 mil for April and May vs. a surplus of $2.73 bil in April-May ’07. The gov’t blamed a 17% decline in corporate income taxes and a 21% drop in sales taxes. German import prices rose 1.5% in June vs. May and 8.9% vs. a year ago, the sharpest jump since Nov. ’00. The gain was driven by a 50% hike in energy costs, underscoring the inflationary pressures facing Europe’s biggest economy. COMING UP TUESDAY

S&P/Case-Shiller home price indexes for May, 9 a.m. EDT. Consumer confidence index for July, 10 a.m. EDT (forecast: 50).