Bayern Munich is a good team and their position in the Champions League is good. However, if we compare their performance with PSG's team, Bayern Munich is in a good place. However, if Bayern Munich meets Manchester City earlier, Manchester City has a higher chance of advancing to the next stage.
I agree that Manchester City is probably the biggest favorite to win the Champions League this year. That being said, ManCity was probably the big favorite to win this competition in the last 5 years in a row or so, but so far they did not manage to win it once. In order to really win the Champions League you not only need to be the best team you also always need a bit of luck and the timing on your side.
Bayern Munich though comes right behind ManCity in my opinion and i also think that this is a great achievement by Bayern. They don't have a rich oligarch or sheikh behind them like PSG or Manchester City and they also don't have huge amount of debts like Real Madrid, Barca or many english clubs. In fact Bayern even has Money laying around in the bank. Still Bayern is able to keep up with those teams.