James is happy at Everton – Ancelotti dismisses transfer talk

A report suggested James, who joined Everton from Real Madrid in September last year, was unhappy and could consider a switch to Atletico.

But Ancelotti played down that talk ahead of Saturday's Merseyside derby against Liverpool.

"He is okay, he has no problem. I talk to him every day, he is happy here, confident, motivated," the Everton manager told a news conference.

"He had a little problem in the last few games with his calf. But now he is in good condition. He really feels good here because everyone takes care of him, and that's it.

James has scored five goals and provided three assists in 17 Premier League games this season.