By Ralph Boulton and Tomasz Janowski

Markets looked also to U.S. President-elect Barack Obama to name key members of an economic team that must tackle a crisis that originated in the U.S. housing market 15 months ago before enveloping the banking system and threatening the very foundations of the global market economy.

"After the world rally on the day of the presidential election, investors have now shifted their focus to how fast, and how well the new administration will address the current economic issues," said Yoo Soo-min, analyst at Hyundai Securities.

The European Central Bank and the Bank of England had been expected to cut interest rates by 50 basis points but markets are now pricing in bigger cuts.

News of bigger-than-expected job losses in the United States, a sharp contraction in the world services sector, steep house price declines and a manufacturing retreat in Britain all underscored the global economic gloom.

Toyota Motor Corp, the world's biggest automaker, slashed its annual operating profit forecast by more than half and its shares tumbled over 10 percent, making it the latest casualty in an industry hit hard by the slump. Goldman Sachs Group Inc was laying off 3,200 employees this week, according to sources familiar with the situation.

Markets buckled under the weight of the grim data, with stocks in Tokyo falling 6.5 percent and elsewhere in Asia by more than 7 percent.

European stocks and Britain's FTSE 100 index were down 4 percent. Russia's MICEX index tumbled 8 percent, prompting a one-hour suspension of trade.

U.S. crude oil lost 2 percent to $63.96 a barrel, against a record high above $147 set in July. The fall, reflecting expectations a global recession, will reduce inflationary pressure on national economies and ease rate cuts.

Australia began this week's round with a 75 basis point cut.

SWIFT ACTION

Obama's landslide win on Tuesday along with the Democrats' tighter grip on Congress, raised hopes of a speedier injection of billions of dollars to shore up the struggling economy.

The first black U.S. president has to wait until January 20 to move into the White House. In the meantime, though, he must decide on a successor for Treasury Secretary Henry Paulson, one of the architects of a $700 billion state rescue package inconceivable before the crisis broke.

Timothy Geithner, president of the Federal Reserve Bank of New York, former Treasury Secretary Lawrence Summers and former Fed Chairman Paul Volcker are among those mooted for the Treasury post. Obama may announce his pick on Thursday.

The ECB, staring at the first euro zone-wide recession since its inception in 1999, is seen certain to cut its benchmark rate by half a point to a two-year low of 3.25 percent. But interest rate traders are pricing in a 75 basis point cut.

A half-point reduction would match the October 8 emergency cut made in unison with the Fed and other major central banks. A larger reduction would be the ECB's biggest ever.

There is also mounting pressure on the Bank of England's Monetary Policy Committee to act firmly with financial markets factoring in a 75 basis point cut. Some economists are even calling for a full percentage point cut or more, which would be the MPC's most dramatic move since it was set up 11 years ago.

"I would vote for a 150 basis points cut," the Daily Telegraph quoted Willem Buiter, a former Bank of England policymaker and professor at the London School of Economics, as saying. "I don't think they're going to do that but I think they're likely to do more than 50 basis points and possibly even 100."

JOB LOSSES

Leading European banks and insurers continued to suffer the effects of the crisis. AXA, Europe's biggest insurer by market capitalization, posted a 0.9 percent fall in sales in the first nine months. While AXA stayed in profit, other European firms, including Dutch insurer Aegon and Belgian financial group KBC, posted losses. [nL6735497]

The crisis is already encroaching on Main Street. World number two sporting goods maker Adidas stood by its 2008 forecasts, but retracted targets for next year, declaring that conditions were too difficult to predict.

A Swedish central bank official said the shape of a Nordic aid package to crisis-hit Iceland had been decided. Norway said earlier this week it would provide Iceland with a 500 million euro ($643 million) loan to help the country rebuild an economy in tatters following the collapse of its biggest banks.

The International Monetary Fund also approved a hefty $16.5 billion loan for Ukraine.

(Editing by Neil Fullick and Jason Neely)

(Reporting by Reuters bureaus worldwide)