Carlo Ancelotti has not ruled Real Madrid out of making a move to sign Trent Alexander-Arnold this month, stating he will 'wait and see' how the saga plays out.

It has been widely reported that Alexander-Arnold will sign for Madrid on a free transfer when his Liverpool deal runs out this summer - but further reports stated this week that the Spanish giants want to make the move happen immediately.

Madrid's First-choice right-back Dani Carvajal is set to miss much of the remainder of the campaign due to injury.

Liverpool are likely to drive a hard bargain to lose one of their key players midway through a season in which they are in pole position to win the Premier League and are still alive in every cup competition - but Ancelotti, whose team are second in LaLiga ahead of Friday's clash with Valencia, did not write off the idea.

He said: "It is difficult for me to talk about that in this context. We are going to have to wait and see.

"We are focused on all these games in January and I've got nothing more to say. It’s not sensible for me to speak about the market right now.

"We will see what will happen but I have a great squad. We have got injuries and problems with that but we are also able to overcome them."

Liverpool take on Manchester United in the Premier League on Sunday, with Arne Slot confirming Alexander-Arnold will be featuring for the Reds.

"I can tell you he's playing on Sunday and hopefully brings the same performance he's been bringing in the last half a year," said the Dutchman. 

"He played an incredible game against West Ham. I see him training hard every day."

Alexander-Arnold ranks second to Mohamed Salah for Premier League assists for the club this season and also sits second to Virgil van Dijk for forward passes.