Honestly? Lloyd had been paying a little more attention to the dog than to his surroundings when Yuri had first spoken up. He really should know better (especially after all those lectures from Kratos), but... well... It's still pretty easy for him to get distracted.

Taking those barks for the greeting they probably are, Lloyd smiles and nods. "It's nice to meet you, Repede." He turns to Yuri. "You, too." Another curious glance at the guy's katana. "Are you a mercenary?"

No, he doesn't really have the tact to be more circumspect than that.