West Brom boss insists Man City in a ‘must-win’ game on Sunday
After a great start to the season the Baggies sit just two points behind their opponents in the Barclays Premier League, despite having a fraction of their budget.
Meanwhile, Roberto Mancini's team have lost their last three matches.
Nevertheless, Di Matteo does not believe his side will be favourites.
When asked that question, he replied: "Are you joking?
"I think City have to win, and we would like to win. I think that's the situation.
"They are the favourites, and we would just like to continue to play the way we've been playing and be competitive. That's our ambition."
Di Matteo added that self-belief will not be an issue for his team, even though they could be without several key players due to injuries and suspension.
He said: "I think we've been playing with confidence for a while now, but we're going to have a few players out.
"We'll have to shuffle the team around a little bit, but I've been pleased with the way we've approached every game since the opening match."
Despite City's recent poor run of results, Di Matteo says they should not be ruled out of the title race.
"Every team is going to lose a game or two during a long season," he said.
"But you look at their squad and the players they have in the squad, it's quite impressive in my opinion."