Mariano Rajoy

European Central Bank: But the ruling People Party suffered its worst result in 24 years in local and regional polls on May 24, raising investors’ concerns that Rajoy could ease off on the reforms that have helped to turn the euro zone fourth-biggest economy into the fastest growing in the bloc, according to Euro News. While the PP got more votes than any other party, its reforms remain unpopular with many Spaniards and new parties, including the anti-austerity Podemos, made gains. Spain has been among investors’ top picks this year due to a recovering economy under conservative Prime Minister Mariano Rajoy and the European Central Bank drive to stimulate activity across the euro zone through bond purchases. The immediate market impact was hardly seismic, but there are signs investors are turning cautious, fearing the next government might need the support of radical parties such as Podemos after the elections expected in November. Italian and Spanish bonds had been among the main beneficiaries of the ECB 1 trillion euro quantitative easing programme that spurred investors into the higher-yielding southern European debt as yields on top-rated bonds vanished. Government bonds generally have suffered a rout in recent weeks but even before it began, Spanish borrowing costs had rebounded more sharply off record lows than those of either Italy or Portugal. (news.financializer.com). As reported in the news.