According to Simon Johnson of the Evening Standard, the two clubs are both interested in the Brazilian, but Watford are set to hold firm this winter.
Hornets chief executive Scott Duxbury said:
"We want Richarlison to be here for many more seasons. We are building a very competitive squad, we have no need to sell.
"We believe in the season being a race and that’s why we will never sell a player in January who we believe will help us. Nobody will be sold that we don’t want to. None of the players making an impact now will go."
The 20-year-old has lit up the Premier League with five goals and four assists this season since joining from Fluminense in the summer for £11.5 million.
Interestingly, the majority of his contributions have come away from home, per OptaJoe:
As you'd expect from a Brazilian attacker, Richarlison is technically gifted. He demonstrated as much when he scored against Everton earlier in November, per ESPN FC's Liam Twomey:
The youngster has also coped well with the rigours of the Premier League, per football writer Michael Cox:
He's undoubtedly done his share of defensive work, too. According to Squawka, Richarlison has won 17 tackles and 44 headed duels, having also made 12 interceptions.
That he's the most fouled player in the English top flight is a testament to his attacking threat, having been on the receiving end of 42.
A fairly uninspiring passing accuracy of 64 per cent could be something of a concern, but given his age, there is plenty of time for him to work on that aspect of his game, and he undoubtedly has a great deal of potential to get even better.
Watford are evidently adamant he won't be leaving any time soon, so it seems he'll be staying put until at least until the summer.
That will also give interested parties longer to assess him before deciding whether to make a serious pursuit of him in the summer or beyond.