SINGAPORE, RAW – Oil jumped to a seven-year high, safe-havens rallied and US stock futures dived on Tuesday as Europe’s eastern flank stood on the brink of war after Russian President Vladimir Putin ordered troops into breakaway regions of eastern Ukraine.

Brent crude futures rose 4.0 per cent to $US97.35 ($A135.37), their highest since September 2014. S&P 500 futures fell 2.0 per cent and Nasdaq futures fell 2.7 per cent.

European equities dropped 1.3 per cent overnight to a four-month low, while the Russian rouble tanked and Russia’s MOEX equity index fell 10.5 per cent.

US markets were closed for a holiday on Monday. Australia’s ASX 200 fell 1.3 per cent in early trade.

Putin on Monday recognised two breakaway regions in eastern Ukraine as independent and ordered the Russian army to launch what Moscow called a peacekeeping operation into the area, upping the ante in a crisis that could unleash a major war.

“In these circumstances, risk metrics are the driving force,” said NAB head of foreign exchange strategy, Ray Attrill.

In currency trade, the safe-haven yen rose 0.2 per cent in Asia to a nearly three-week high of 114.50 per dollar. The euro fell 0.1 per cent to a one-week low of $US1.1296 ($A1.5708) and the Russian rouble touched a one-month low of 80.289 per dollar.

It was not immediately clear whether the Russian military action was the start of an invasion of Ukraine that the United States and its allies have warned about for weeks. There was no word on the size of the force Putin was dispatching, when they would cross the border and exactly what their mission would be.

US President Joe Biden signed an executive order to prohibit trade and investment between US individuals and the two breakaway regions of eastern Ukraine, the White House said.

Britain vowed to impose sanctions on Russia, which it warned could invade Ukraine imminently.

Nerves drove US Treasury yields lower, with benchmark 10-year Treasury yields down 5.5 basis points (bp) to 1.8715 per cent. Bets on Federal Reserve rate hikes also eased and the chance of a 50 bp hike next month fell below one-in-five.