Sky Sports News understands Vinicius Junior will stay at Real Madrid beyond this summer.
The Spanish club do not want to sell him and are confident he will sign a new deal.
His current deal has a year left to run but Arsenal are interested and keeping a close eye on his situation.
Sky Sports News reported on Monday that Real and his representatives will hold more discussions about his future this week. That is with a view to making progress on a new long-term contract at the Bernabeu.
New boss Jose Mourinho is said to be a big fan of Vinicius and wants him to be one of his top Galacticos.
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Was Vinicius Rumour just a contract squabble?
Analysis by Sky Sports News’ Lyall Thomas:
The saga of Vinicius Junior has some of the common elements of a fresh contract dispute; claims of a deadlock over salary demands, renewed interest from Arsenal and more negotiations on the horizon.
But there is no strong public evidence that Vinicius wants to leave Real Madrid for any reason, sporting or otherwise, no quotes, no interviews, no suggestive social media posts as yet.
