As Arsene Wenger admitted that he is feeling the pressure to bring in big-name signings, he revealed that he has had scouts watching Schalke’s Lewis Holtby.

There is thought to be significant funds at Wenger’s disposal in this month’s transfer window, although Holtby is unlikely to drain too much of the club’s resources. The 22-year-old midfielder’s contract is set to expire in the summer and the Germany international has already confirmed that he will not be extending his deal.

Wenger confirmed that Holtby’s situation was being monitored with Germany now a focus for scouts.

"The emerging countries to produce players look to be Germany and Spain and they have many good young players," Wenger said, according to Sky Sports.

"When you look at the results of France against Germany at U17 in the last few years, and U16—4-0, 4-1 to Germany—that shows the trend will be more in favor of the Germans.

"We have looked at Holtby, and have played against him.

"Our scouts are kept on alert and the quality of the scouting is linked with that."

Tottenham have also been linked to Holtby but Schalke general manager Horst Heldt has said that his club have yet to receive any approach for a potential cut-price January deal.

"We have not been receiving anything from any club regarding a winter transfer for Lewis Holtby,” he revealed.

"We have also not been given any information by his agent. I believe Lewis Holtby will be a full part of our squad until the end of the season."

Arsenal could also be set to pursue another leading Schalke player, with TalkSport reporting that defender Benedikt Howedes has postponed discussions on a new contract until at least the end of the season.

The Germany international’s current deal is set to expire in the summer of 2014, meaning that, if he fails to sign an extension in the summer, Schalke could be inclined to sell the 24-year-old when they can still get a sizeable fee.

Both Arsenal and Manchester United have been linked to the center-back.

West Brom’s Jonas Olsson is another central defender to have mentioned in connection with a potential move to the Emirates and the 29-year-old has said he is flattered by the speculation.

"It's flattering with the interest but I am focusing on West Bromwich Albion and the current season," Olsson told Swedish publication Expressen.

"I am happy at the club and, as I have said before, it should be something attractive if I should leave West Brom."

Olsson’s boss Steve Clarke, though, has claimed that his key players will not be sold in this transfer window, despite the reported interest in the Swedish international from Arsenal and clubs in Turkey.

“Speculation is natural, because people make up stories to generate the interest,” Clarke said, according to Sky Sports. “I know they make them up.

"But it's not unsettling for me in anyway, because I know that, come 1st February, the players that I need to be here will still be here."

Meanwhile, Arsenal may be lagging behind in the race to sign Crystal Palace winger Wilfried Zaha. ESPN claims that Manchester United are now in pole position to sign the highly-rated 20-year-old and are confident of completing a deal in the summer.

It is believed that United’s bid is strengthened by their greater willingness to allow Zaha to remain at Palace until the end of the season.