Bonds: Investors stay on the sidelines ahead of votes in Parliament, US Fed

These were the movements in some of the most widely-followed 10-year sovereign bond yields:

US: 2.71% (-3bp)

UK: 1.27% (+0bp)

Germany: 0.20% (-1bp)

France: 0.61% (+0bp)

Spain: 1.24% (+2bp)

Italy: 2.63% (-3bp)

Greece: 3.98% (-8bp)

Japan: 0.01% (+1bp)

Longer-term Gilts finished the Tuesday session little changed as investors waited on Parliament's votes on the amendments to the Prime Minster's Brexit plans that had been tabled by MPs.

But caution appeared to prevail for the most part elsewhere.

Stateside, and writing ahead of the US central bank's policy meeting the next day, analysts at Bank of America-Merrill Lynch told clients that policymakers at the Federal Reserve might struggle to deliver a message that was as 'dovish' as markets were anticipating.

Rate-setters at the Federal Reserve would adopt more data-dependent language, BofA-ML said, but no announcement on the balance sheet was likely which might disappoint some investors.

"The Fed will likely be challenged to deliver a sufficiently dovish message vs market expectations, which risks a flatter rates curve and a risk off USD reaction," they told clients in a research note.

What little fresh economic data was to be had out of the US was mixed.

On a positive note, S&P Case-Shiller's US home price index rose at a 0.3% month-on-month clip in November (Barclays: 0.4%), with the modest gain possibly suggesting "stabilization in overall home price inflation after it slowed steadily throughout 2018", according to analysts at Barclays Research.

However, the US Conference Board's consumer confidence index for January surprised to the downside, printing at 120.2 (consensus: 124.7), versus a reading of 126.6 in the previous month.

According to Jake McRobie at Oxford Economics, that meant that consumer confidence in the US had now retraced roughly two thirds of the post-election 'Trump Bump'.

"The recent drop in consumer expectations mark the start of a convergence – not a collapse – of confidence back to economic reality," McRobie said.

"Confidence has weakened almost entirely through the expectations channel amid the impacts of financial market volatility, trade policy uncertainty, and the government shutdown in recent months – wiping away around two-thirds of the ‘Trump bump’. Meanwhile, consumers’ assessments of present conditions remain overwhelmingly positive, in large part due to the strong labor market."

In the periphery meanwhile, the yield on the benchmark 10-year Greek bond was down by eight basis points to 3.98% on the back of the results of a syndicated sale of five-year debt by Athens.