After further talks with Jorge Mendes over Joao Felix, Arsenal are now fully focused on Mykhaylo Mudryk, according to reports.

In recent days, Fabrizio Romano had reported that Arsenal had held initial talks with Joao Felix’s agent Jorge Mendes, and they had plans for fresh talks this week. However, it seems those talks haven’t led to a deal.
Speaking on his YouTube channel, Romano now claims Mendes has held new conversations with the English clubs interested in Felix, including Arsenal. But Arsenal are now 100% focusing on Mudryk.
The Gunners haven’t placed an official bid for Felix, and it doesn’t look like they’re going to at the moment. They’re prioritising the Mudryk deal for the January window.
Goal España report that though there’s interest from several Premier League clubs in Felix, Atletico Madrid sources insist they aren’t currently negotiating with anyone.
Atletico are still happy for Felix to remain at the club, though they’ll negotiate an exit if a good offer arrives. As well as Arsenal, PSG, Manchester United, Chelsea, and Aston Villa have been linked with the player.

Ben Jacobs also recently reported that Arsenal are continuing to prioritise a move for Mykhaylo Mudryk. A loan for Felix was offered to them, but his wage demands and loan fee are very high.
Felix would want around €4m more than Mudryk in wages, and both players would cost a significant fee to complete a permanent move, so Mudryk would be better value.