Just another wild day in the financial markets? No. Yesterday’s action contained two ingredients that made it different from recent eurozone-inspired spectaculars.

First, hopes that the US Federal Reserve could roll out some big weaponry to invigorate the US economy are evaporating. Operation Twist may sound innovative and brave – qualities in short supply in policy circles – but it looks suspiciously like a dance around the houses.

The Fed is buying $400bn (258bn) of long-dated debt (six to 30-year notes) while selling the same amount of shorter-dated debt. It may succeed in pushing down the yield on 30-year treasury bills, which may in turn modestly reduce mortgage rates in the US, but that doesn’t sound a sure-fire way to stimulate demand and overcome significant downside risks to the economic outlook, as the Fed put it.

It’s a little like promising to increase spending on the Visa card but then using it to repay the Amex bill, noted Nick Parsons of National Australia Bank drily. Quite.

But perhaps the bigger jolt to confidence came from the east. China’s manufacturing output is slowing, according to the HSBC’s estimate of the purchasing managers’ index.

The bank’s chief economist in China was quick to argue that fears of a hard landing are unwarranted but, as ever in markets, it’s the difference from expectations that counts. It is now harder to believe the optimists’ story that warm breezes from China, perhaps spiced with a gentle dose of inflation, can raise temperatures in Europe and the US.

This prompted a rush out of emerging market assets, perhaps the more significant story yesterday. Commodity prices were whacked – copper was down by 8% and oil by 4%.

Big mining companies, having spent the past year asserting that commodity prices really would be stronger for longer this time, suddenly sound less confident about demand. But BHP Billiton, the world’s biggest miner, had profit margins of 47% last year and made a 39% return on capital. Could such fabulous returns really be repeated?

A revised optimistic outlook might state that lower commodity prices would be the best medicine for the global economy and western consumers. There’s a lot of sense in that argument. Remember how oil at $40 a barrel in early 2009, down from $140 six months before, delivered a shot of adrenaline?

Yet $106 a barrel, yesterday’s price for Brent crude, feels a long way from offering a glimpse of salvation. What’s more, anybody with a pension invested in the FTSE 100 will have mixed feelings about a correction in commodity prices: miners and oil companies account for a third of the multicultural index. Vedanta, Antofagasta, Kazakhmys and Fresnillo led the way down today.

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