Later today the Australian Bureau of Statistics will release its inflation data for the third quarter of 2019.
A weak reading could put pressure on the Reserve Bank to cut rates further in its forthcoming meetings.
If this were to happen, it would likely lead to the interest rates on term deposits being taken to even lower levels.
In light of this, I think investors ought to consider replacing term deposits with these quality ASX dividend shares:
Coles Group Ltd (ASX: COL)
Although this supermarket operator's shares are trading close to their all-time high, I don't think it is too late for income investors to consider an investment. At present I estimate that its shares provide a forward fully franked 3.5% dividend yield. Whilst this isn't the biggest yield on the market, I expect it to grow at a solid rate over the next decade thanks to its new strategy and cost cutting plans.
Transurban Group (ASX: TCL)
This toll road operator could be a great option for income investors looking to replace a term deposit. This is because Transurban is regarded as a bond proxy due to its ability to consistently grow its distributions year after year. It is able to achieve this thanks to its high quality portfolio of roads and their strong pricing power. This year, for example, the company plans to increase its distribution by 5.1% to 62 cents per security. This equates to a forward 4.2% distribution yield.
Westpac Banking Corp (ASX: WBC)
Rather than putting your money into its term deposits or savings accounts, I would put my money into this banking giant's shares. Although things have been tough for the big four banks, I'm optimistic that the tide is now turning. Especially given the positive signs coming out of the housing market, which could lead to increasing demand for mortgages. There is speculation that Westpac will cut its dividend down to 84 cents per share next month. However, this still equates to a generous 5.8% yield on an annualised basis.
