EMERGING MARKETS-Latin American assets steady amid geopolitical tensions, benign inflation data

By Twesha Dikshit

Jan 8 (Reuters) - Latin American assets were steady on Thursday as escalating geopolitical tensions weighed on sentiment, while investors evaluated domestic data and awaited key U.S. data that could provide clues on the monetary policy outlook.

The U.S. Senate was due to consider a resolution on Thursday that would block U.S. President Donald Trump from taking further military action against Venezuela without congressional approval.

Trump told the New York Times that the U.S. could oversee the South American nation and control its oil revenue for years.

Venezuelan sovereign debt shed some of the gains that occurred following the U.S. capture of President Nicolas Maduro five days ago. Government bonds slid up to 2.5 cents to a bid of between 31.6 and 40.7 cents.

Investors, however, remained bullish on Latin American assets, expecting U.S. moves to aid a rightward shift in the region during a crucial election year that could lead to market-friendly reforms.

MSCI's Latin American equities index .MILA00000PUS was up 0.1%, while the corresponding currency gauge .MILA00000CUS was little changed.

DOMESTIC DATA IN FOCUS

Mexican equities .MXX and the peso MXN= ticked lower. The country's headline inflation slowed more than expected in December, data from statistics agency INEGI showed, with consumer prices rising 0.28%. A Reuters poll of economists expected a 0.4% increase.

"While the easing in price pressures last month leaves the door open to a (rate) cut in February, we think it's more likely that the central bank will opt for a pause next month," said Kimberley Sperrfechter, emerging markets economist at Capital Economics.

Mexico's central bank reduced its key interest rate by 25 basis points to 7% last month and adopted a cautious tone regarding further cuts.

Brazil's main equity index .BVSP rose 0.4% while the real BRL= currency was flat. Industrial production in Latin America's largest economy remained unchanged in November on a monthly basis, according to domestic data, with high interest rates weighing on activity.

A Reuters poll of economists expects Brazil's annual inflation rate to have slowed further last month to within the central bank's target range.

If confirmed by official data on Friday, it could lead to renewed pressure from President Luiz Inacio Lula da Silva for rate cuts.

Consumer prices in Chile fell slightly more than forecast in December, data from statistics agency INE showed. The peso CLP= was 0.2% lower, while equities .SPIPSA ticked up 0.3%.

Argentina's benchmark equities index .MERV was down 0.4%, while Colombia's main index .COLCAP lost 0.2%.

On the trade front, Ireland said it would vote against the European Union's free trade deal with the Mercosur bloc of South American countries, calling recent concessions "insufficient."

French farmers blocked streets in Paris in a protest against the agreement, which is due for a vote on Friday. Italy said it wanted a stricter threshold for suspension of imports under the deal.

Key Latin American stock indexes and currencies at 14:43 GMT: