European stocks declined for first session in five ahead of Wednesday’s Dutch elections, debt ceiling expiration and the conclusion of the Fed’s 2-day meeting where it is expected to raise rates by 25 bps. Tightening concerns emerged, also dragging down Asian shares and S&P futures, while the dollar continued its rise for a second day. Crude oil has ended its six-day drop. The pound tumbled 0.8% to the lowest since mid-January in a delayed reaction after Theresa May won permission to trigger the country’s departure from the EU. On today’s US calendar, we get the Producer Price Index although most NYC-based traders are likely taking a snow day off or trading from home.

A quick reminder of the key events this week:

In a relatively quiet session, the standout move was the plunge sterling which dropped on Tuesday after Britain’s parliament paved the way for Prime Minister Theresa May to launch divorce talks with the European Union. Curiously, on Monday, sterling had jumped 0.4 percent after Scotland’s First Minister Nicola Sturgeon demanded a new independent referendum in late 2018 or early 2019, once the terms of the UK’s exit from the EU are clearer with the delayed selloff coming largely on priced-in news.

Europe’s Stoxx 600 Index was headed for its first decline in five days with every industry except healthcare in the red in early trading. India’s NSE Nifty 50 Index surged to a record and the rupee climbed to an 11-month high after Prime Minister Narendra Modi’s victory in state elections. The yield on 10-year Treasuries remained near the highest level of the year and oil fluctuated after declining for six straight days.

The MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.2 percent, while Japan’s Nikkei closed down 0.1 percent. Shares of Toshiba closed up 0.5 percent after plunging as much as 8.8 percent, their biggest one-day loss in almost a month. The company said it would “aggressively consider” a sale of most of Westinghouse and announced it had received approval from regulators to extend for a second time the Tuesday deadline for its official third-quarter earnings. Its statement earlier in the session that it had requested the extension to expand a probe into problems at its U.S. nuclear unit Westinghouse sent the shares tumbling, Reuters reported.

Chinese shares reversed early gains after data showed retail sales dropped more than expected in the first two months of the year, posting their first single-digit Y/Y increase since 2003.

Other China data on Tuesday was more upbeat and positive for the global economy, with investment and industrial output expanding more than expected, but investors feared those signs of strength may not be sustainable. China has cut this year’s economic growth target to about 6.5% to give policymakers more room to push through painful reforms to contain financial risks. The economy grew 6.7 percent in 2016, the slowest pace in 26 years. On Monday, Goldman Sachs upgraded Chinese stocks to “overweight” on better growth prospects and a bullish view on the country’s banking sector, a move interpreted by many as a top-tick indicator. 

Overnight, Wall Street was mixed, with the Dow Jones Industrial Average down 0.1 percent, while Nasdaq rose 0.24 percent and the S&P was little changed. 

According to Bloomberg, putting a damper on risk sentiment today are expectations the Federal Reserve “will raise borrowing costs at a faster pace than was expected at the start of this year have surged as data globally pointed to firming growth and accelerating inflation.” The question for most traders now is how fast the Fed will move, and they hope to get the answer tomorrow in the comments accompanying Wednesday’s expected quarter-point increase for clues. “The market is waiting,” said Peter Schaffrik, global macro strategist at RBC Europe Ltd. “Moves today have been fairly muted. The Fed is clearly on everyone’s mind. The rate hike is a foregone conclusion, so it’s the press conference that’s really relevant.”

“On one hand, the market ponders a surprise hold, in which massive unwinding of positions could take place with the hike already priced in,” Jingyi Pan, market strategist at IG in Singapore, wrote in an note. “On the other hand, concerns have also been paid to an acceleration in the Fed’s path to normalization, where the likelihood of four Fed hikes has been raised, up from the current projection of three,” she said. “The immediate reaction is likely to be seen in the dollar and upsides towards December’s high on the dollar index may be eyed.”