Pep Guardiola's City withdrew from the Sanchez deal over spiralling costs, but the Premier League leaders will still be in the market to strengthen in attacking areas come the end of the season.
As such, Spanish gossipmonger Don Balon claims that Asensio is on their radar.
Asensio, who has been widely predicted to emerge as a genuine superstar in the next few years, has ambitiously been linked with a number of clubs in recent months, including both Manchester United and Arsenal. A lot of that speculation came before he signed a new contract that tied him to Real until 2023 and upped an €80m buyout clause to €500m.
Even so, City are allegedly willing to offer in excess of €100m and Guardiola is said to be 'convinced' that 22-year-old Asensio will 'quickly' become one of the best in the world.
Only Gareth Bale and Cristiano Ronaldo (both 6) have scored more La Liga goals for Real than Asensio (4) so far this season. He has netted as many as eight in all competitions and has already played 29 times in total in 2017/18 as he further establishes himself with Los Blancos.
If City's interest in the player is at all genuine, which it still remains to be seen, it seems unlikely that Real would be willing to negotiate with anyone unless the offer hit get obscenely high and previously unseen numbers, again unlikely.