Sky Sports News has been told Vinicius Junior will remain with Real Madrid beyond this summer.
The Spanish club do not want to sell him and are confident he will sign a new contract.
His current deal has a year to run but Arsenal are interested and watching his situation closely.
Sky Sports News broke the news on Monday that there will be further talks over his future between Real and his representatives this week. That is with a view to furthering a new long-term contract at the Bernabeu.
New manager Jose Mourinho is said to rate Vinicius highly and wants him to remain one of his top Galacticos.
Was Vinicius Rumour just a contract row?
Sky Sports News’ Lyall Thomas analysis:
The story surrounding Vinicius Junior has some of the classic ingredients of a new contract dispute; reports of an impasse over salary demands, new interest from Arsenal and further talks on the horizon.
But there is no strong public evidence that Vinicius wishes to leave Real Madrid for any reason, sporting or otherwise, no quotes, no interviews, no suggestive social media posts as yet.