Liverpool are moving Fluminense striker Joao Pedro.
Globoesporte says Fluminense agreed to sell the 17-year-old to Watford last year but the Reds have made enquiries after the young Brazilian caught their eye.
The deal with the Hornets is not binding due to the striker's age, though Watford would be due compensation if the move fell though.
Watford have already enjoyed success working the Brazilian market with Richarlison, who has since moved onto Everton.
However, a third party could approach Fluminense and pay the compensation on top of their own offer to sign Pedro according to the report.