I have noticed that "wiggle" on my aircraft sometimes (ATR76) and I think it's one of two things. 1. Wind correction 2. Aileron trim. Sometimes the ATR needs a bit of trim aileron wise to keep straight. If that is not there, the autopilot will keep a minute but constant wing down to keep level. The quick changeover from LNAV to HDG and vice versa causes a little wiggle.