* Sterling jump 1% as UK and EU agree new Brexit deal
* Lack of support from Northern Irish partners a snag
* Dollar weak after U.S. retail sales fall for first time in seven months
* Turkish markets in focus before talks with U.S. over Syria
By Marc Jones
LONDON, Oct 17 (Reuters) - Confirmation of a new Brexit deal lit a fire under Europe's financial markets on Thursday, sending sterling to a five-month high, European stocks to a year-and-a-half peak and causing safe-haven assets to plummet.
It wasn't a completely clear Brexit road ahead. Familiar Irish border snags remained a spoiler for Northern Ireland's Democratic Unionist Party, but after three years of tortuous uncertainty any deal was a deal to cheer.
"We have a great new Brexit deal," British Prime Minister Boris Johnson said and "Where there is a will, there is a deal - we have one!" echoed European Commission President Jean-Claude Juncker as the news broke from Brussels.
Sterling, which has been the key gauge of Brexit sentiment all along, jumped more than a percent against the dollar, taking its gains over the last six days to 6% and which if it holds, will be a more than 30-year record.
It ran as far as $1.2988 to the highest against the euro since May at 0.86 pence. The euro also jumped to a near- two-month high against the dollar of $1.1139 in its sixth day of gains in the past seven.
"The deal has been announced, but the key hurdle of being voted into the UK Parliament remains," said ING's chief EMEA FX and interest rate strategist Petr Krpata.
London's heavyweight FTSE and the pan-European STOXX 600 both jumped 0.6%, having been flat beforehand. UK Gilts , German Bunds, the Swiss franc, gold and most other safe havens began selling off.
Barclays Capital European equities strategist Emmanuel Cau said tha deal "should provide legs to the rotation from UK exporters to domestic plays" as it should help rebuild confidence.
Wall Street was expected to reopen higher and emerging-market stocks gained for a sixth day -- their longest winning streak since early April -- after U.S. Treasury Secretary Steven Mnuchin said U.S. and Chinese trade negotiators were nailing down a Phase 1 trade deal text for their presidents to sign next month.
But U.S. retail sales fell for the first time in seven months, suggesting manufacturing-led weakness was spreading to the broader economy. U.S. consumption has been one of few bright spots in the global economy, so the data fanned worries the trade war would ultimately tip the world into recession.
"While the U.S. suspended a hike in tariffs, it hasn't gone as far as scrapping the tariffs altogether, so it is hard to expect a quick pick-up in the economy," said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management.
The dollar index was last at 97.692, having reached its lowest level since Aug. 27. The dollar was flat at 108.75 after peaking at 108.90 to the Japanese yen and down against the euro at $1.11.
In commodities, oil prices slipped after industry data showed a larger-than-expected build-up in U.S. crude stockpiles, adding to concerns that global demand for oil may weaken amid further signs of an economic slowdown.
Brent crude futures fell 0.25% to $59.27 a barrel. U.S. West Texas Intermediate crude lost 0.5% to $53.01.
Turkey's fragile markets remained in focus after the country's military advance in Syria created tensions with United States and Europe and incurred mild sanctions. Turkish President Tayyip Erdogan is to meet with U.S. Vice President Mike Pence and Secretary of State Mike Pompeo later.
Although the U.S. pulled its troops out of the area to allow Turkey's push, Pence and Pompeo are expected to urge Erdogan to declare a ceasefire, something Erdogan says will "never" happen. U.S. President Donald Trump warned of "devastating" sanctions if discussions did not go well.
Turkish stocks were down 1.8% and the lira weakened to 5.8877 to the dollar. It has lost nearly 5% this month, making it the world's worst performer for October.
Reporting by Marc Jones, editing by Larry King