Firming expectations of a Greek bailout lifted world stocks, the euro and commodity prices on Wednesday, and sent Greece's borrowing costs lower.
European finance ministers will hold teleconference to discuss the Greek budget crisis on Wednesday, a European Commission spokesman said, while French Le Monde newspaper said the teleconference is at 1400 GMT (9 a.m. EST).
Earlier, sources in the German coalition said Berlin is in intense international and domestic negotiations about possible aid to Greece, sources in the coalition said.
World equities measured in MSCI All-Country World Index <.MIWD00000PUS> rose 0.6 percent, with the pan-European FTSEurofirst 300 <.FTEU3> index rising 1.3 percent and Athens' benchmark <.ATG> up 4.8 percent. Greek bank shares <.FTATBNK> surged 8 percent. U.S. stock index futures rose about 0.2 to 0.3 percent, pointing to a stronger start for Wall Street. In Asia, Japan's Nikkei average <.N225> put on 0.3 percent.
The bailout news also boosted the appeal for lower-rated euro zone government bonds, with the premia investors demand to hold them easing.
The Greek/German 10-year government bond yield spread narrowed 44 basis points to 276 bps -- its tightest in three weeks, and the cost of insuring against a sovereign debt default by Greece, Spain, Portugal and Italy dropped.
Yields on benchmark 10-year Bunds were up 1 basis point at 3.213 percent, while those on 10-year U.S. Treasuries were down 1 basis point at 3.631 percent.
Some analysts said the effort to help Greece by European countries was positive for the financial markets, but Athens needed to take tough action to fix its financial problems.
Yet the longer-term solution, in Greece but also in other countries -- including outside the euro area -- with excessive deficits, will have to be multi-year fiscal consolidation, which will not be painless, Barclays Wealth said in a note.
Greece's public sector workers on Wednesday staged the first major test of Athens' crisis-driven austerity measures.
Concerns over Athens' fiscal problems as well as other peripheral euro zone countries, such as Portugal and Spain, have pressured the financial markets for weeks.
The euro was up 0.2 percent at $1.3815 to recover from earlier losses. The currency gained 1 percent against the dollar on Tuesday.
The market is to-ing and fro-ing on the prospect of any sort of package to help Greece, said Adam Cole, global head of currency strategy at RBC in London.
This is an unprecedented situation and there are several conceivable resolutions, and a strong case can be made for any of them, and that is weighing on the euro.
Sterling turned lower against the dollar and the euro after Bank of England Governor Mervyn King did not rule out more quantitative easing.
The pound was down 0.4 percent against the dollar at $1.5654, though the dollar <.DXY> fell versus a basket of major currencies.
In commodity, oil prices rose 0.2 percent at $73.87 a barrel as the U.S. currency dipped, while copper prices gained 0.6 percent.
(Additional reporting by Emelia Sithole-Matarise, Naomi Tajitsu and Jessica Mortimer in London; Editing by Andy Bruce)