Milan, November 19 - Italian financial markets joined the European rally Monday amid optimistic signs that the United States may avoid its fiscal cliff, as well as rumours of more aid for troubled Greece. Talks between leaders of both parties in the US towards resolving a budget crisis appeared positive, soothing financial markets around the world. Meanwhile, Greece appeared to have met the necessary conditions for release of its next aid payment. In Milan, the FTSE MIB jumped by 3.05%, to close at 15,308.96 points while the AllShare gained 2.9% to end the day's trading at 16,166.98. The bond market also rallied Monday. The spread between Italy's 10-year bond and the German benchmark equivalent closed at a moderate 354 basis points, with a yield on Italian paper of 4.90%. The spread measures investor confidence in the Italian economy when compared with that of powerhouse Germany. Investors were encouraged by news that US President Barack Obama and leaders in congress are negotiating to head off tax increases and mandatory government spending cuts that are set to take effect on January 1, 2013. It's feared that if those cuts and increases go ahead, it could push the US into another recession. Markets were also buoyed after the Greek government on Monday presented emergency legislation to help finalize its austerity commitments to bailout creditors. The legislation, covering spending cuts and reforms, come one day before European finance ministers will decide whether to release the next 31.5-billion euro loan installment for Greece. That should fulfill the conditions previously set by lenders. In Frankfurt the DAX gained 2.49% to close trading at 7,123.84 points while on the London Stock Exchange, the FTSE 100 index jumped by 2.36% to 5,737.66 points. Madrid's Ibex 35 index rose by 2.34% to close at 7,765.70 points and in Paris, the Cac 40 index rose by a dramatic 2.93% to end the day at 3,439.58 points.