Barroso and PM Orban held constructive talks Polish retail sales support hawks on the boardYesterday, PM Mr Orban held talks with Commission head Mr Barroso and said that all obstacles before starting the IMF talks have been removed. Mr Barroso was a bit more cautious and said that he welcomes the statement of the PM, but added that the Commission will discuss the issue only today. A state secretary also said that Hungary could be removed from the excessive deficit procedure. Markets welcomed the news happily and forint appreciated sharply from 298/€ in the morning to 293/€ a day later. This is the 50- and 200- day moving average so it could be decisive where we go from here. The Hungarian central bank Governor highlighted the inflationary impact of the government measures and said that it may lift inflation in 2013, but did not specify how much. In Poland, the retail sales posted solid growth (15.7% m/m, 10.7% y/y) and unemployment declined a bit more than expected. These are positive news for the hawkish camp on the MPC. Although we continue to stick to our base scenario of one off interest rate hike in May, we are willing to hear more comments from MPC on the latest macro-data to confirm our call.