A report in a German newspaper saying the Bundesbank was checking the legality of the latest move by the European Central Bank to ease the region's debt crisis also weighed in the fixed income markets.

"The near term outlook is likely to remain one of caution until some progress in the euro zone is in evidence," said Mitul Kotecha, head of global FX strategy for Credit Agricole.

Later this week Spain is due to present its draft budget plan for 2013, outline new structural reforms for its economy, and release the results of stress tests on the banking sector.

The FTSE Eurofirst 300 index .FTEU3 of top European shares, which has surged in the third quarter partly due to the efforts by the ECB's to ease the burden on heavily-indebted euro zone nations, was unchanged in early trade. However, the main German and French stock indexes opened lower. .GDAXI .FCHI

The euro inched down 0.1 percent to $1.2915, retracing some of the gains made since ECB President Mario Draghi's promise to do whatever it took to preserve the currency and the U.S. Federal Reserve's decision to ease policy.

German Bund futures inched up 15 ticks to 140.40 on fears that any Bundesbank challenge to the ECB latest debt plan may delay its implementation.

In commodity markets, where concerns about slowing global growth predominate, copper prices rebounded slightly to $8,227.75 per metric ton from one-week lows hit on Monday while gold steadied around its mid-September lows at $1,765.10 an ounce.

(Reporting by Richard Hubbard; editing by Philippa Fletcher)

• A Permanent Economic Emergency