TREASURIES-Bond futures prices ease as U.S. government shutdown continues

NEW YORK, Jan 21 (Reuters) - U.S. Treasury debt futures prices fell 0.1 percent on Sunday after a U.S. government shutdown extended into its second day.

Democrats and Republicans, locked in a bitter dispute over immigration, failed to agree on a last-minute deal to fund government operations, causing a shutdown at midnight on Friday. Moderate senators from both parties held talks on Sunday seeking to break the political impasse.

Benchmark yields hit a three-year peak on Friday as the government shutdown loomed.

Ten-year notes futures TYv1 last fell 2/32 in price, indicating the yield in the cash market is set to rise. (Reporting by Koh Gui Qing; Writing by Megan Davies; Editing by Daniel Wallis)