* Greece to be in focus after rescue promise
* Emerging markets underperforming
* US jobs data may find small audience
By Jeremy Gaunt, European Investment Correspondent
LONDON, March 26 (Reuters) - The European Union, the European Central Bank and International Monetary Fund have moved to muffle the euro sovereign debt crisis, so the week ahead will be the test of whether investors can still hear anything.
It will also feature one of the biggest data releases of the month -- U.S. jobs -- but global reaction will be muted as it comes when major markets are either closed or on a short day.
Investors may also keep a close eye on emerging market stocks, which contrary to their billing have been underperforming.
The main issue, however, is almost certain to be Greece.
For a small country that is best known for its ruins and beaches, it has had a remarkable run in the market limelight this year, fostering on-again off-again caution on equity markets and, most of all, shaking faith in the euro.
The single currency has fallen more than 6.5 percent against the dollar this year as investors have questioned the short- and long-term sustainability of a currency that meshes dynamic northern economies with ill-disciplined southern ones.
A new phase has been entered, however, with the EU and IMF pledging assistance to Greece -- and implicitly to other weak links such as Portugal -- if needed.
The ECB also has said it will keep its current minimum rating threshold for collateral accepted against central bank funds beyond year-end, essentially ensuring that country ratings downgrades will not immediately cut banks off from borrowing.
In theory, this should draw a line under the crisis, assuring investors there will be no messy defaults and breakups and allowing borrowing costs in stricken countries to fall.
Indeed, the euro rose on Friday, Greek and other peripheral economy bonds were outperforming German debt and the cost of insuring Greek bonds against default fell.
But the question investors will likely answer in the week ahead, is whether they reckon they can move on from the crisis or whether it is too large and too wide to be contained.
Portugal, after all, was downgraded just as the EU was coming up with its 'Save Greece' plan.
"The issue of country indebtedness is going to be with us all year and next year on a kind of revolving basis," said Michael O'Sullivan, head of global asset allocation for Credit Suisse's private bank.
HITTING A WALL?
It is not just the euro that will be effected if the debt crisis expands. There are broad implications for all kinds of assets, particularly those where there is more risk.
Some of those are already struggling. World equities as measured by MSCI are up only around 1.75 percent so far this year, which is nearly a quarter over.
Even that, however, masks a diverging risk picture. Developed market stocks are up nearly 2 percent; emerging markets are barely in the black.
Given that many investors have looked at emerging markets as their most likely target for returns, this reflects something of a setback.
While few if any analysts or investors would question the long-term growth story of emerging markets, it may be that a combination of the doubling of the MSCI stock index during last year's rally, plus general volatility and global economic uncertainty has taken the sheen off for the time being.
"Valuations are no longer cheap. Investors can't get any return on deposits or fixed income so they have been piling into equities or emerging markets. But inflows have not been anything like what they were in the last 7-9 months of 2009," said William Calvert, portfolio manager at AXA Framlington.
On the macroeconomic front, meanwhile, the big event of the week ahead may lack its usual punch.
U.S. non-farm payrolls report to be released on Friday is expected to show the creation of some 168,000 jobs in March.
But Asian markets will be closed, Europeans on holiday and U.S. investors planning a short day ahead of a long weekend.
So reaction to any good or bad news will mostly have to wait until the week after. (Additional reporting by Sujata Rao; Editing by Toby Chopra)