Bring an 8-quart pot of water to a boil. Immerse two wide-mouth pint-size canning jars, lids, and bands in the water and boil for 10 minutes to sterilize. With tongs, transfer to a clean dishtowel to drain.Toast the mustard seeds and peppercorns in a small dry skillet over medium heat until fragrant, 1 to 2 minutes. Grind to a medium-coarse texture in a spice grinder or with a mortar and pestle. Pack the fennel into the jars, layering it with the spice mixture.
In a medium saucepan, bring the vinegar, sugar, oil, 1 Tbs. salt, and 1/2 cup water to a boil over medium heat. Pour the liquid over the fennel until it reaches the top of the jars. Screw on the lids, cool to room temperature, and refrigerate for 3 days before using. The fennel will keep in the refrigerator for at least 2 weeks.
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