retrofit with rxjava handling network exceptions globally

You need to use the operator onErrorResumeNext(Func1 resumeFunction), better explained in the official wiki:

The onErrorResumeNext( ) method returns an Observable that mirrors the behavior of the source Observable, unless that Observable invokes onError( ) in which case, rather than propagating that error to the Subscriber, onErrorResumeNext( ) will instead begin mirroring a second, backup Observable

In your case I would put something like this:

getCurrentUser = userApi.getCurrentUser()
.onErrorResumeNext(refreshTokenAndRetry(userApi.getCurrentUser()))
.observeOn(AndroidSchedulers.mainThread())
            .subscribe(...)

where:

    private <T> Func1<Throwable,? extends Observable<? extends T>> refreshTokenAndRetry(final Observable<T> toBeResumed) {
        return new Func1<Throwable, Observable<? extends T>>() {
            @Override
            public Observable<? extends T> call(Throwable throwable) {
                // Here check if the error thrown really is a 401
                if (isHttp401Error(throwable)) {
                    return refreshToken().flatMap(new Func1<AuthToken, Observable<? extends T>>() {
                        @Override
                        public Observable<? extends T> call(AuthToken token) {
                            return toBeResumed;
                        }
                    });
                }
                // re-throw this error because it's not recoverable from here
                return Observable.error(throwable);
            }
        };
    }

Note also that this function can be easily used in other cases, because it’s not typed with the actual values emitted by the resumed Observable.