I had the same problem with my E36 (1997), it turned out to be a short in
the wire coming from the ABS sensor in the wheel well. The lights would
come on whenever it was wet outside. I figured it must have been a short so
I started tracing the wires and discovered that a plastic cover at the point
where the wire entered the front left wheel well was open. It was so caked
with dirt that it must have acted as a wick whenever it rained thus shorting
out the ABS. No problems since cleaning it up and snapping the cover
closed. Since the ABS and traction control work in conjunction with each
other I'm not surprised a problem with one affects the other.
It could be a number of things but I'd start with checking the ABS sensors
and the wiring.
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