Watermarks can be added in various ways. If you already have an existing watermark in form of a PDF, you could just use the overlay functionality (see Merging PDFs). Alternatively, a watermark can be added via CSS. The following sample CSS uses a page margin box to add the semi-transparent text "CONFIDENTIAL" above each page:

@page {
  @left-middle {
    content: "Confidential";
    z-index: 100;
    font-family: sans-serif;
    font-size: 80pt;
    font-weight: bold;
    color: gray(0, 0.3);
    text-align: center;
    text-transform: uppercase;
    transform: rotate(-54.7deg);
    position: absolute;
    left: 0;
    top: 0;
    width: 100%;
    height: 100%;