In which of the following source code blocks can local data objects be defined?

Local data objects can be defined within a subroutine because subroutines are designed to encapsulate a specific piece of functionality and maintain their own local context. In this context, local data objects are variables that only exist within the scope of the subroutine, ensuring that they do not interfere with other parts of the program that might use similar variable names. This encapsulation is a key aspect of modular programming, allowing for better organization and maintenance of code.

In contrast, other options like static methods, function modules, and PBO (Process Before Output) modules may have different scopes and behaviors regarding data management. While static methods and function modules can also define local data objects, the core emphasis on the "local" aspect in this question aligns specifically with subroutines, given their characteristic of scoped data management. PBO modules are often utilized in the context of user interface processing in SAP, where they primarily handle screen-specific functionalities rather than defining local variables as a primary focus. Thus, the distinct role of subroutines in defining local data sets marks it as the correct answer in this context.