By Karin Strohecker, Dhara Ranasinghe and Davide Barbuscia

LONDON/NEW YORK (Reuters) -Market jitters over the U.S. debt ceiling lifted the cost of insuring exposure to its debt to the highest level in over a decade on Thursday, while JPMorgan warned of a "non-trivial risk" of a technical default on U.S. Treasuries.

A showdown over U.S. government efforts to raise the $31.4 trillion debt ceiling for the world's largest economy has sent jitters through global financial markets. Some U.S. Treasury bill yields have hit fresh highs on fears that the deadline to raise the borrowing limit may come sooner than expected.

Spreads on U.S. five-year credit default swaps - market-based gauges of the risk of a default - widened to 50 basis points, data from S&P Global Market Intelligence showed, more than double the level in January.

The cost of insuring U.S. debt against default for one year stood at over 100 basis points as of Wednesday, according to Refinitiv data. This is well above 2011 levels, when a standoff over the debt ceiling triggered the first credit downgrade of the U.S. government.

Meanwhile, yields on U.S. T-bills, the most sensitive to the debt ceiling debate, again pushed higher, with three-month T-bill yields hitting a new 22-year peak of 5.318%.

JPMorgan said in a note published late Wednesday it expected the debt ceiling to become an issue as early as May, and that the debate over both the ceiling and the federal funding bill would run "dangerously close" to final deadlines.

The bank's U.S. rates strategy team expects the Treasury could run out of available resources by mid-August.

"Signs of stress typically start in the T-bill market 2-3 months before the X-date given money market funds (MMF), which are large holders of T-bills, will begin to more actively advertise that they don't hold any bills that mature over those dates," JPMorgan said.

TAX FLOWS

Investors are closely watching the Treasury's 2022 tax filing season receipts to determine revenues. Tax collections brought total deposits into the Treasury General Account at the Federal Reserve to $283.53 billion on Tuesday, with a closing balance of $252.55 billion after withdrawals.

"Today is another big day to watch as it will capture a portion of Tuesday's deadline day tax flows, yet to be reported," Deutsche Bank said in a note on Thursday, adding that the overall total was softer than some initial assumptions.

Weaker-than-expected tax collections earlier in April indicated that the government could exhaust its ability to pay all of its obligations - the so-called "X-date" - sooner than previous August forecasts, unless the federal debt ceiling is raised, some analysts have said.

Recurring legislative standoffs over debt limits in the last decade have largely been resolved before they could ripple out into markets, but some investors worry the Republican party's narrow majority in Congress could make it harder to reach a compromise this time.

Republican U.S. House Speaker Kevin McCarthy on Wednesday unveiled a plan to raise the borrowing limit by $1.5 trillion and cut federal spending by three times that amount.

President Joe Biden has said that Congress should raise the $31.4 trillion debt limit without conditions, as it did three times under his Republican predecessor, Donald Trump.

"The serious beginning of the discussion to avoid a technical default is encouraging news," BMO Capital Markets Strategists said in a note.

"Our baseline cynicism leaves us skeptical of any agreement being struck before the 11th hour."

(Reporting by Karin Strohecker and Dhara Ranasinghe, Davide Barbuscia, editing by Kirsten Donovan, Megan Davies and Richard Chang)