European shares surged and the Greek stock market jumped 8% while the borrowing costs of Italy, Spain, and Portugal — the countries most likely to be hit if Greece heads for the eurozone exit — fell sharply.

Angela Merkel has pressed Greece to deliver on commitments to carry out reforms, making it clear that Athens has to show the will to reach a deal with creditors.

US stocks rose for a second day after an encouraging report on retail sales suggested that Americans are finally feeling confident enough to spend more.

Greece’s international creditors yesterday signalled that they were ready to compromise to avert a default even as Athens warned it might skip an IMF loan repayment due tomorrow.

Work is under way on a new deal between Greece and its troika creditors after both sides agreed to a number of compromises.

Greek Prime Minister Alexis Tsipras last night told politicians in Athens that the government is seeking a bridge agreement to provide government funding until June, when he hopes to have a more lasting arrangement with international creditors.

Greece’s new leftist government appealed to the Central Bank yesterday to keep its banks afloat and vowed to respect EU rules as it seeks a negotiated solution with eurozone partners to reduce its debt burden.