GLOBAL MARKETS-Not-so-Super Mario sends European assets tumbling

* Euro surges, shares slump as ECB measures disappoint
* European stocks turn lower, bond yields rise
* Dollar falls away from 12-1/2 year high
* Oil jumps on report Saudi Arabia to call for OPEC cut

By Marc Jones
LONDON, Dec 3 (Reuters) - European shares suffered their
biggest fall in three months on Thursday and the euro leapt more
than 2 cents, its biggest surge since March, on disappointment
with the European Central Bank's latest easing measures.
The ECB cut its deposit rate by the minimum 0.1 percentage
points most traders had expected, to -0.3 percent, and extended
its asset purchase programme but did not increase the amount of
government bonds it buys each month.
The euro EUR= sprang 2.3 percent higher against the dollar
to $1.0860, having been nearer $1.06 just hours earlier, while
German and other government bond yields saw their biggest jump
in months. For shorter term two-year German bonds it was the
sharpest rise since 2011. GVD/EUR
Stock markets were clearly shaken too. The FTSEurofirst
.FTEU3 dropped as much as 2 percent as trading screens went
red across Europe, although Wall Street opened marginally higher
having seen the S&P 500 .SPX drop 1 percent on Wednesday.
"It clearly looks like Super Mario is disappointing the
markets, which were expecting a lot more," said Stephane Ekolo,
Chief European Strategist at Market Securities.
"Bear in mind that (he) has accustomed market participants
to surpass their lofty expectations. This time around it is a
horse of a different colour."
Risk assets had already been left bruised after Federal
Reserve chief Janet Yellen said on Wednesday she was "looking
forward" to hiking U.S. interest rates, something expected to
happen for the first time in almost a decade on Dec. 16.
That had sent the dollar .DXY on another tear higher but
disappointment at the ECB's measures turned things around
completely, triggering in turn a rally in U.S government bond
markets and a handful of key emerging market currencies.
EMRG/FRX
Gold XAU= shot off a 5-1/2-year low too, while oil jumped
$2 a barrel as the weaker dollar dovetailed with a report that
Saudi Arabia would call for OPEC to cut its production by 1
million barrels a day at the group's meeting on Friday.
U.S. crude CLc1 was up 1.6 percent at $40.58 a barrel
after dropping 4 percent overnight, with Brent up more than 2
percent at $43.50. LCOc1
OPEC sources and analysts said the reported Saudi proposal
was unlikely to find support, however, as Iraq is struggling to
balance its budget and Iran has long argued its market share was
stolen by rivals during the years of sanctions.
"It is very difficult to cut 1 million bpd collectively.
The Saudis do not want to change their previous talk. No cut
without cooperation," one Gulf OPEC source told Reuters. O/R

ECB EASE FAILS TO PLEASE
Wall Street managed to fend off the worst of Europe's
volatility, with its main S&P 500 .SPX , Dow Jones Industrial
.DJI and Nasdaq markets .NDX all opening fractionally higher
after significant losses in the previous session.
Draghi and his colleagues did extend the minimum length of
time it will buy government bonds for, but there was
disappointment there too as it had been expected to increase the
amounts it buys a month from 60 billion euros to 70 billion.
The assessment from markets was that the ECB was unlikely to
be able to bring euro zone inflation, which is currently barely
visible, back to its target of just below 2 percent.
The euro zone five-year, five-year breakeven forward rate --
an inflation gauge often cited by the ECB -- fell to 1.75
percent after the meeting, having been at around 1.81 percent
beforehand. EUIL5YF5Y=R .
"Everyone was expecting Draghi to be the white knight for
Europe once again and he hasn't really showed up," said Aberdeen
Asset Management Investment Manager Patrick O'Donnell. "Today's
measures amount to tinkering around the edges."

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ECB rates, inflation and euro http://link.reuters.com/jer39v
Global assets in 2015 http://link.reuters.com/dub25t
Currencies vs dollar http://link.reuters.com/tak27s
Commodities performance http://link.reuters.com/rac73w
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