The rivals are threatening to leave third-place Chelsea trailing in their wake, and yet neither side have really hit their stride yet.
United, who lead City by three points, have already been beaten by Everton, Tottenham Hotspur and Norwich City, and have shipped 21 goals in 15 games -- more at this stage of the campaign than in any season since 2001-02.
And while City boast the last unbeaten record in English league football, they have drawn six times and were eliminated from all European competition on Tuesday after losing 1-0 at Borussia Dortmund in the Champions League.
"We are both in a similar situation," says Manchester United midfielder Ryan Giggs, whose side edged Reading 4-3 in a madcap encounter last weekend.
"We (United) are in a good position in the league but haven't hit the form we did in parts last season. That can be frustrating because we want perfection.
"We want to be the best team and each individual wants to be the best player. We must be doing something right because we are in a good position and there is the belief we can score goals.
"But that doesn't mean we should neglect our defending and not try and stop the goals we are leaking because we need to stop conceding them."
City drew first blood in last season's title race with a 6-1 win at Old Trafford that sent shock waves around Europe, before a 1-0 success at the Etihad in April took them to the brink of the championship.
With United having missed out on the title to Roberto Mancini's men on goal difference alone, Giggs believes that Sunday's encounter could have significant ramifications for the title race again.
"We have found over the last couple of years that the derby, with the money City have spent and the quality they have brought in, has got bigger and bigger," said Giggs.
"The two games against them were the difference last season. Hopefully we can get the right result and that will be the difference come the end of this season."
Giggs, 39, will be making a record 36th derby appearance if he takes to the field on Sunday, but City's Brazilian right-back Maicon will be sampling the occasion for the first time.
A close-season signing from Inter Milan, Maicon is a veteran of the Milan derby and the Belo Horizonte clash between Atletico Mineiro and his former club, Cruzeiro, and he is eager to experience what Manchester has to offer.
"My strongest memory of the Milan derbies was the day Inter won 4-0 (in 2009-10), and we also won the Champions League in the same season," he said.
"It was a great game, a great derby, difficult to forget. All over the world, the derby is a different game to any other.
"It is a passionate game, whether you are in Manchester, Milan or Brazil, and I am sure Sunday will be just the same.
"I remember playing for Cruzeiro against Atletico Mineiro, at a time when Mineiro were the better team. We won that game, and it changed our whole season for the better.
"This is something that is built into derbies -- it can give the team a boost of confidence for the rest of the season."
United also lost in the Champions League in mid-week, going down 1-0 at home to Romanian champions CFR Cluj, but their progress to the last 16 was already assured.
United midfielder Tom Cleverley will undergo a scan on a calf injury to find out if he will be fit to play, but wingers Antonio Valencia and Nani are both out as is midfielder Anderson.
Nemanja Vidic and Shinji Kagawa are rated as doubtful.
Mancini hopes to be able to recall Spanish midfielder David Silva after a hamstring injury.
James Milner and Gael Clichy could also be in contention, but Aleksandar Kolarov has been ruled out with an ankle problem.
Source: AFP
Source: AFP