*

Stocks up 0.6%, currencies slip 0.2%

*

U.S. Treasuries sell off sharply, yield curve steepens

*

Bond markets face pressure amid tariff threats

(Updates to mid-session trading)

By Ragini Mathur, Twesha Dikshit and Johann M Cherian

Jan 20 (Reuters) - Most Latin American currencies

slipped on Tuesday as U.S. President Donald Trump's threats to

reignite a trade war with Europe over Greenland sent ripples

through ‌global markets.

Trump doubled down on his ambitions for the Arctic island,

saying there was "no going back" on his goal to control

Greenland while ​refusing to rule out military force.

The U.S. President warned on Saturday he would impose an

additional ‍10% levy from February 1 on goods imported from eight

European nations, ⁠rising to 25% on ⁠June 1 if there was no deal

on Greenland.

European Union leaders were preparing to respond, with an

emergency summit scheduled for Thursday in ‌Brussels to discuss

retaliatory measures.

"While (geopolitics) adds a new wrinkle ​to the tariff issue,

we believe cooler heads will prevail and that these tariff

threats are being used as a negotiating tactic for control of

Greenland," said Paul Stanley, ⁠chief investment officer at

Granite Bay Wealth Management.

The escalating ‍tensions have ​revived the "Sell America"

trade that first emerged after Trump's "Liberation Day" levies

announced last April as U.S. equities, Treasuries and the dollar

were all in declines.

In LatAm, the risk-off mood was reflected ‍in currencies,

with MSCI's gauge down 0.2% and Colombia's peso

and Brazil's real down 0.4% and 0.1%,

respectively.

Mexico's peso and Peru's sol were flat, while

Chile's peso bucked the trend with a 0.4% rise.

The turmoil extended into fixed income markets, where U.S.

long-dated Treasuries sold off sharply and the yield curve

steepened. Investors were digesting both Trump's tariff threats

and upheaval in the Japanese bond market.

With U.S. markets closed ​on Monday ‍for a holiday, Tuesday

marked the first opportunity for traders to react to the weekend

developments.

Emerging market bonds also took a beating. Ukraine's

sovereign bonds posted their worst day of the ​year so far, while

South African and Indonesian sovereign debt saw their steepest

declines since July.

EQUITIES BROADLY TRACK COMMODITY STRENGTH

Bourses in the region were volatile for much of the session.

MSCI's index tracking LatAm stocks shrugged off

earlier declines and edged up 0.6%.

Gains were particularly in commodity-linked stocks as prices

of precious metals and crude oil traded higher.

Mexican gold and silver miner Industrias Penoles

gained 2.4%, while Brazilian mining giant Vale added

1.5%.

Energy companies in the region ​such as Colombia's Ecopetrol

and Argentina's YPF added over 2% each. A

media report said Ecopetrol is taking preliminary steps to

resume importing natural gas from Venezuela.

Key Latin American stock indexes and currencies at 1914 GMT:

Latin American market prices

from Reuters

Eq Latest Daily % change

ui

ti

es

MS 1479.34 -0.49

CI

Em

er

gi

ng

Ma

rk

et

s

MS 2901.72 0.56

CI

La

tA

m

Br 165730.03 0.53

az

il

Bo

ve

sp

a

Me 67476.43 0.01

xi

co

IP

C

Ch 11159.35 0.14

il

e

IP

SA

Ar 2958819.51 1.574

ge

nt

in

a

Me

rv

al

Co 2398.14 0.87

lo

mb

ia

CO

LC

AP

Cu Latest Daily % change

rr

en

ci

es

Br 5.3771 -0.14

az

il

re

al

Me 17.5883 -0.11

xi

co

pe

so

Ch 884.48 0.44

il

e

pe

so

Co 3671.5 -0.41

lo

mb

ia

pe

so

Pe 3.3566 Flat

ru

so

l

Ar 1434 0.28

ge

nt

in

a

pe

so

(i

nt

er

ba

nk

)

Ar 1485 1.35

ge

nt

in

a

pe

so

(p

ar

al

le

l)