Arsenal problem is lack of composure when playing with big clubs such as Man city. Arsenal is doing well quite alright but due to their inability to maintain calmness in big matches, I would favor Manchester city ahead of them.
I know I am new to watching football, and maybe the Arsenal you describe is the Arsenal that existed before now, but what I have seen this season in Arsenal is that they are not afraid to go against the big teams, they see themselves as one of the big teams in the competition too, and that has helped them. They have a good record against other big teams this season and that record can continue because I still notice that they are still very underrated, and not still taken seriously.