* German 10-year yield set for biggest weekly jump since June * Yields rise further on Friday * PMIs expected to set Friday’s market tone AMSTERDAM, Feb 19 (Reuters) - German benchmark 10-year bond yields were set for their worst week since June, driven up by expectations of reflation in the United States, which has caused a surge in global bond yields. On Friday, Germany’s 10-year yield, the benchmark for the euro area, was up 2 basis points to -0.32%, hitting its highest since June. The yield rose 11 basis points this week, its biggest weekly jump since mid-June. The 30-year yield, which tends to be even more sensitive to the reflation bets, was up similarly in its biggest weekly rise since August. Bond yields have appeared decoupled from economic data releases in recent sessions. Earlier in the week, they fell despite strong U.S. retail sales data, and surged on Thursday despite weak employment data, again out of the United States. “The sell-off in recent days is in our view mostly flow driven rather than changes to the underlying or expected fundamentals,” said Piet Haines Christiansen, chief analyst at Danske Bank. Friday’s focus is on February euro zone purchasing managers’ index surveys. A Reuters poll expects the composite figure covering both manufacturing and services in the area, due at 0900 GMT, to show a smaller contraction than in January. In the bloc’s lead economy, Germany, which reports national figures at 0830 GMT, business activity growth is expected to slow slightly. “Today, the release of the eurozone PMI will be an important test for euro government bonds (EGB),” UniCredit analysts told clients. With investors currently pricing in a fast improvement in the economic outlook, the risk from the PMIs to the market is asymmetric, they said. “Indeed, if the PMI comes in stronger-than-consensus, euro government bond yields might remain at current levels. On the other hand, should the PMI come in weaker than consensus, we would expect to see a downward correction in government bond yields in the eurozone.” In Italy, where Prime Minister Mario Draghi easily won a lower house confidence vote on Thursday, yields shot up to their highest since January late on Thursday and were little changed on Friday at around 0.66% That pushed the gap between Italian and German 10-year yields -- the risk premium on Italian debt -- closer to 100 basis points, compared with around 87 bps at the start of the week. (Reporting by Yoruk Bahceli)