Operation Twist continues

Today's papers are full of ideas about what Prince William should do with the £10m inheritance he receives on his 30th birthday tomorrow. The Daily Telegraph helpfully suggests a house in Kensington and a nice pair of Purdey's, with anything left over spent on wine. But it isn't as if the future monarch has been strapped for cash until now and surely he could be more inventive. With £10m he could pay the pensions of two doctors or 300 nurses. He could employ David Beckham for 20 weeks.

Or he could improve Britain's international relations by handing it to President Hollande to help the French public sector work fewer hours and retire earlier. Because nobody else seems willing to do so, least of all Germany's Chancellor Merkel. Yesterday's story that she would support a €600bn fund to support the price of Spanish and Italian bonds has already been bubbled. The chancellor told reporters that whilst "there is the possibility in the EFSF and the ESM to buy bonds... that is purely theoretical [and] this is not a subject for debate right now." Better scratch that idea then.

There was good news from Athens though. New Democracy's Antonis Samaras has formed a coalition with Pasok and Democratic Left. With a 58-seat parliamentary majority he hopes to keep Greece on the austerity track towards continued euro membership. In return he will ask - and probably receive - concessions from Brussels on the precise harshness of the austerity conditions.

So it was a bit of a good-news-bad-news day for the euro and its effect on the currency's value was muted. The single currency is unchanged against the US dollar and a touch firmer against the yen, which was hurt by a larger than expected trade deficit.

Unfortunately it was a bad-news-bad-news day for sterling. The UK employment figures included 8.1k new jobseekers in May and the minutes of the June Monetary Policy Committee meeting showed a surprisingly close decision not to embark on a new round of asset purchases. The governor and three others wanted to do another £25bn or £50bn; the other five preferred to keep the programme on hold for now. "Most", however, acknowledged "that further stimulus was likely to become warranted at some point".

The news went down well with the equity market and badly for the pound. It cost sterling half a US cent, a third of a euro cent and three quarters of a yen. The pound is unchanged against the Canadian and Australian dollars and a cent lower against the Kiwi, which was helped by a 1.1% quarterly expansion of New Zealand's economy.

The Federal Reserve's decision to expand its "operation twist" by $267bn struck the right note for the dollar. The process involves the Fed buying longer-maturity bonds and selling a similar amount of short-term debt. Its aim is to "put downward pressure on longer-term interest rates and help to make broader financial conditions more accommodative." There was little reaction from the dollar.

Today's ecostats include Euroland and US purchasing managers' indices, UK and Canadian retail sales and US existing home sales. ECB President Mario Draghi gives a speech this afternoon ahead of tomorrow's EU leaders' and finance ministers' meetings. Investors will be gagging to find out if he has any ideas about further "unorthodox measures" to help the euro.