* 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.
TALKING TURKEY
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)