Unfortunately for income investors, unless there is a big improvement in Australian economic data in the coming months, I expect the Reserve Bank to take the cash rate lower again in 2020.
This will inevitably put pressure on the banks to cut the interest rates on offer with savings accounts and term deposits.
But don't worry, because you can generate an income from these ASX dividend shares instead:
Accent Group Ltd (ASX: AX1)
Accent Group is the footwear-focused retail group behind chains such as Athlete's Foot, HYPE DC, and Platypus. It also owns the exclusive rights to a number of popular global footwear brands in the Australian market. Its shares may have recently hit a 52-week high, but I don't believe it is too late to invest. This is because of the way it continues to perform strongly despite the tough trading conditions being experienced in the retail sector. I believe this has positioned it to increase its dividend again in FY 2020. At present I estimate that its shares offer a forward fully franked 4.7% dividend yield.
National Australia Bank Ltd (ASX: NAB)
My favourite option in the banking sector right now for valuation and yield reasons is NAB. I think its shares are trading at a very attractive level and could provide solid total returns in 2020. Especially given how the housing market is improving. If this continues, it could drive solid mortgage loan growth and support NAB's bottom line. Another positive is its overweight exposure to business banking. Furthermore, even after factoring in a potential dividend cut in FY 2020, its shares offer a very generous forward fully franked 6.5% dividend yield.
Sydney Airport Holdings Pty Ltd (ASX: SYD)
A final dividend share to consider is Sydney Airport. As the main gateway into Australia, I believe it is well-placed to benefit from increasing international tourism. Another positive is that domestic tourism has been improving. Combined with other growing revenue streams, I believe the airport operator is in a position to grow its dividend again in 2020. At present Sydney Airport's shares offer an estimated forward 4.6% dividend yield.
