Well, the real world examples of people with similar conditions suggest that Tranquils would not have sex. The three disorders which are generally thought of as a deficiency in emotion are "Blunted Affect", where the shows no sign of emotion, Autism, a neurological disorder in which the individual is unable to effectively comprehend social interactions, or Psychopathy, when the person lacks empathy or compassion and thus the intrinsic understanding of emotional states.
Blunted Affect is generally a symptom, something observed and reported rather than a specific disorder. It can be caused by a wide range of things, but is typically a result of brain damage. It also lies along a spectrum, meaning individuals suffering from Blunted Affect can either be those who display everything from slightly subdued emotional response to people who lack even the desire for communication. It is almost invariably true that those who suffer from all but the mildest forms of Blunted Affect are typically asexual by preference, though more moderate cases may engage in sex to please a partner and bring themselves what minor emotional satisfaction that can bring. However, Blunted Affect to the level that Tranquils would likely find familiar would almost certainly render the individual almost catatonic with disinterest.
As far as Psychopathy is concerned, it is unlikely that Tranquils suffer from this particular disorder. First, Psychopaths are not necessarily without emotion, though this is certainly the case to some extent. Instead, they lack the ability to empathize with people. Furthermore, Psychopathy is generally understood to contain an element of profound egotism and thus ambition. This can take many forms, but generally Psychopaths are entirely interested in their own goals, such as they may be, to the complete exclusion of anyone else's emotions or concerns.
This does not necessarily imply sadism; Psychopaths merely lack the ability to empathize, they do not necessarily have any desire to cause pain or harm to others. Psychopaths willingly manipulate, lie, steal, or hurt insofar as such things can fulfill their desires, but they might also help people if doing so somehow fulfills their purposes. Furthermore, Psychopaths, being driven by intense egotism, often develop effective means of mimicking normal emotional behavior. Think Dexter Morgan, but not necessarily with the desire to kill. Psychopaths can have intense desire for sexual gratification, particularly when couple with other psychological disorders like sadism. All in all, it is highly unlikely Tranquils are in any way similar to Psychopaths.
Autism seems the most likely candidate. Within Autism is a disorder known as "Alexithymia." This disorder is characterized by the complete inability to even verbalize one's own emotional state. While not necessarily without emotion completely, someone with Alexithymia is unable to differentiate between different emotional states, thus rendering them effectively without emotion. Oftentimes, those with Alexithymia will approach life from an almost robotic state of analysis. Even their dreams take on a mundane character, merely recounting normal events such as going to the grocery store.
Those with Alexithymia, like Psychopaths, are generally incapable of empathy or engaging in meaningful relationships. Unlike Psychopaths, people suffering from Alexithymia do not have the intense drive of egotism to propel them to commit antisocial behavior. Likewise, like Blunted Affect, Alexithymia is a dimming of all emotional responses, yet Alexithymia does not dampen the individual will to live or other smaller ambitions.
Tranquils seem to me to be mildly Autistic and suffering from severe Alexithymia, this coupled with the drive to obey the orders of the Circle. In general, those with Alexithymia have little sex drive, though they are not bothered or disgusted by it. As a result, typical sexual interactions result from the desires of their partner, whom they simply follow the lead of.
All of this is a very long way of saying that I would assume a Tranquil would be more than capable of sex, but I doubt they would engage in it without an explicit order. We've seen that Tranquils have preferences, and they certainly at least have a compulsion to follow the will of the Magi. Likewise, sexual gratification has biological effects on the body that emotion plays little role in. The oxytocin and other chemicals released during sex compel the body far more than emotional attachment (itself a chemical response, but that's neither here nor there since clearly Tranquils lack that chemical response)
Long story short, Tranquils almost certainly can have sex, it's just unlikely that they do have sex.